Description
Today, the system is broken: the
use of resources worldwide is
outstripping supply. It already
requires three planet’s worth
of materials to maintain the
pattern of consumption we’re
accustomed to in the Western
world
, and from metals to food
and water, energy to timber,
the demand on resources
continues to grow. Three billion
more middle-class consumers
are expected by 2030
1
, and
commodity prices are likely to
increase and become more
volatile. Everyday things will
become less affordable or even
unavailable, and business as
usual cannot be sustained.
THE BUSINESS
OPPORTUNITY
OF CLOSED LOOP
INNOVATION
King?sher’s progress towards
products that waste nothing
CONTENTS
INTRODUCTION:
IAN CHESHIRE
INTRODUCTION:
ELLEN MACARTHUR
NET POSITIVE
WHY THE WORLD
NEEDS A NEW
APPROACH
SEIZING
OPPORTUNITY
IN A CIRCULAR
ECONOMY
ROLLING UP
OUR
SLEEVES
KEY
CONTACTS
CLOSING THE LOOP
ON OUR
PRODUCTS
CALL TO
ACTION
ACCELERATING THE
TRANSITION TO
A CIRCULAR
ECONOMY
WHAT OUR FIRST
STEPS HAVE
SHOWN US
2
3 29
28
26
4
5
6 23
17 7
OUR VISION
We would like
to see a world in
which creating and
using products
wastes nothing
This is our vision for closed loop
products and it drives the Innovation
pillar of our Net Positive approach.
In this booklet we are pleased to share
some important ?rst steps towards
making closed loop a reality in our
business, through our suppliers and in
partnership with the Ellen MacArthur
Foundation. We hope that these
innovative products and projects start to
show what can be done by us and
by others embarking on the journey
to a circular economy.
1
2 3
In today’s dominant economic model the
consumer walks away with, and ultimately
throws away, the product and all the
valuable materials and resources within it.
The result is a linear ?ow of resources, materials and products –
and, importantly for retail, it means once you’ve sold your product,
you’ve lost those materials forever.
Resources are ?nite, but the demand for materials continues to
grow, as does the volatility of prices. That’s why it is my conviction
that business can bene?t by creating circular material ?ows –
generating value again and again. Those ?nancial bene?ts have
been proven through our research with McKinsey. For business,
the circular economy provides the opportunity to improve resilience
and competitiveness, regain control of resources and ultimately
drive growth.
The Ellen MacArthur Foundation focuses on the key pressure points
and levers that will accelerate the transition to a circular economy,
and working alongside our global partners to help create concrete
business oferings is an integral part of our mission.
King?sher was instrumental in the creation of the Foundation
three years ago and has supported its work ever since. What they
saw early on was that a diferent, better model was possible and
have enthusiastically taken up the challenge of rethinking their
business practices.
Today, the projects and products that King?sher is developing are
important because they indicate the start of a new wave of thinking
– a change to the way business is done, and they demonstrate
how we can make the shift. There is intent right across the business
from the top down. They realise the extent of the challenge – that
this is not just about one perfectly closed loop product or a small
set of individuals in innovation teams – it’s a change across the
business and throughout the systems it operates in. What I ?nd most
encouraging is the amount of efort put into product development
and business model research to turn King?sher’s circular economy
vision into a reality.
The innovation I’m seeing at King?sher, and in pioneering businesses
elsewhere, makes me optimistic for the future. When we started
working on the concept of a circular economy, it immediately
appeared as a tangible solution to the challenges brought about by
resource constraints. Having demonstrated its potential and now
seeing pioneering companies actively engaged in the transition,
I have never felt more convinced.
A PARADIGM SHIFT IN RETAIL
Innovation is critical to what we want to do
as a business: making it easier for people to
have better homes and better lives.
In turn, it is through innovation that we will build our future as a
business. We believe that closed loop thinking has the potential
to be a game changer for our innovation. That’s why it’s a pleasure to
be sharing with you here the ?rst lessons from a revolution
in innovation.
Closed loop thinking – also known as the circular economy –
is an idea for a diferent way of doing business. It underpins our
vision for Net Positive Innovation, a world where creating and using
products wastes nothing. Over the last few years, we’ve been
working with the Ellen MacArthur Foundation to pioneer this new
thinking. It’s already clear that this is an idea that engages people
and inspires change.
For me, one of the most exciting things about closed loop innovation
is that this is going to drive the next generation of business growth
for King?sher. Why? Put simply, if done well, closed loop innovation
can cushion our business from price volatility, provide us with
competitive advantage, help us to enter new markets and enable us
to build better relationships with customers and suppliers. If we can
make closed loop a reality in our business – pushing ourselves to
develop new closed loop products and services, showcasing what’s
possible and encouraging suppliers to innovate – I believe that in
?ve or ten years’ time, we can become famous as a market-leading
closed loop business.
To close the loop, we must think diferently – right from the initial
design phase through the entire manufacturing process. It will
require new business practices, such as ‘take back’ services.
We can’t perfectly close every single loop in one go. By taking
the ?rst steps, however, what we can do is radically cut the
amount of resources, energy and costs involved and potentially
create new forms of income.
Our target is to get to 1,000 products with closed loop credentials
by 2020. I could argue that out of our 40,000 products, that level
of ambition is not enough. This ?rst phase is about developing
path?nder ideas for closing the loop at King?sher, getting our
supply chain engaged in creative new ways of operating, and
activating the collective brains of 80,000 people across the
King?sher Group to work on this challenge. In this booklet, we
highlight some of the key projects we’ve undertaken to close the
loop in our innovation. Already there are some others in the pipeline,
including some in early stage development supported by funding
from the UK Government’s Technology Strategy Board. These are the
foundations for making a circular economy a practical reality.
A NEW SPUR TO INNOVATION
IAN CHESHIRE
KINGFISHER’S
GROUP CHIEF EXECUTIVE
CLOSED LOOP
INNOVATION
IS GOING TO
DRIVE THE NEXT
GENERATION
OF BUSINESS
GROWTH FOR
KINGFISHER
DAME ELLEN MACARTHUR
CHAIR OF TRUSTEES
ELLEN MACARTHUR
FOUNDATION
IT IS MY
CONVICTION
THAT BUSINESS
CAN BENEFIT
BY CREATING
CIRCULAR
MATERIAL FLOWS
– GENERATING
VALUE AGAIN
AND AGAIN
5
Finite resources, growing
demand
Today, the system is broken: the
use of resources worldwide is
outstripping supply. It already
requires three planet’s worth
of materials to maintain the
pattern of consumption we’re
accustomed to in the Western
world
1
, and from metals to food
and water, energy to timber,
the demand on resources
continues to grow. Three billion
more middle-class consumers
are expected by 2030
2
, and
commodity prices are likely to
increase and become more
volatile. Everyday things will
become less afordable or even
unavailable, and business as
usual cannot be sustained.
TODAY, THE SYSTEM
IS BROKEN: THE
USE OF RESOURCES
WORLDWIDE IS
OUTSTRIPPING
SUPPLY
As one of the world’s largest
home improvement retailers, we
feel these pressures acutely – all
of which have implications for our
bottom line:
l For our supply of sustainable
timber, we use a forest area
roughly equivalent to the size
of Switzerland each year. Of
course continuing pressure on
forests will increase the price
we currently pay for our timber
supply – and that increase
could be anywhere between
30% and 75% by 2020
3
.
l It costs 50% more to buy
one of B&Q’s iconic orange
buckets today than it did three
years ago
4
– a re?ection of the
volatility and increase in the
input cost of plastic.
l Whilst our recycling rates
continue to improve and we
strive towards our zero-to-
land?ll targets, the overall
amount of waste our business
generates has continued to
increase – as does the cost we
pay to dispose of it.
The types of products which
retailers make and sell are also
part of that problem, sometimes
being used inefciently and
creating unnecessary waste:
l Estimates vary, but most agree
that the average power drill is
used for less than 30 minutes in
its whole lifetime.
l 35 million paint brushes are
discarded each year across the
UK alone
5
.
l 40 million tonnes of electronic
waste are discarded around
the world every year
6
.
This is a challenge to each and
every one of us on the planet.
To succeed, businesses, including
ours, must do more than minimise
their negative impact – we must
embrace these challenges as an
opportunity to have a positive
impact on the world.
New innovation: closed loop
products
The resources to support a
prosperous life for the world’s
population need to be used more
sustainably. A new perspective
on consumption and waste is
needed, moving from a world in
which we take resources from
the ground, make products out
of them and dispose of them, to
a world in which we source,
design, make and use products
in a very diferent, closed loop
way (see circle l).
This new way of seeing resources
looks to extract value from what
might otherwise be waste, to
imagine the next life of a product
or material, and to design the
systems needed to share, repair,
reuse and harvest products
and materials.
Closed loop products are at
the heart of the opportunity.
Around the world innovators
are starting to embrace the
exciting opportunities to redesign
products using recycled or
renewable materials instead of
virgin materials. If this can be
achieved, products will be more
innovative, more afordable and
more sustainable.
New environment: a circular
economy
Seizing the opportunity means
creating a circular economy
(see circle l), through a policy
and business environment that
drives and accelerates closed
loop innovation at scale. As
has been seen with paper and
cardboard recycling, with the right
environment and systems, closing
the loop can happen efciently in
large volumes. The opportunities
are clear, but no single entity can
make this happen on their own.
The Ellen MacArthur Foundation,
of which King?sher is a founding
global partner, is leading the
debate about how to get
the right policies and
systems in place to
accelerate the transition
to a circular economy.
New opportunity:
the bene?ts to
grasp
Working with McKinsey
& Company, the Ellen
MacArthur Foundation has
identi?ed tangible and compelling
economic opportunities from
creating a circular economy.
The material cost savings
of adopting this approach,
for example, are
estimated at over
US$1 trillion per
annum towards
2025
7
. The opportunity
goes beyond simply
making savings.
Reusing, remanufacturing
and harvesting products
and raw materials could
lead to signi?cant job creation
including up to 322,000 direct
jobs across the EU27 in recycling
alone
8
. The circular economy is
not about doing the same thing
with less. It’s the opportunity
to create a whole new way of
doing business, creating growth,
increasing competitiveness and
becoming more resilient.
WHY THE WORLD NEEDS
A NEW APPROACH
SEIZING OPPORTUNITY IN A
CIRCULAR ECONOMY
At King?sher, we use
a forest area roughly
equivalent to the size of
Switzerland each year.
Due to the rise in raw
materials costs, an
iconic B&Q plastic
bucket now costs
50% more than
three years ago.
50%
40 million tonnes
of electronic waste
discarded around the
world every year.
40m
Closed loop
products waste
nothing when created and
used. They are made from
recycled or renewable materials
and use only renewable energy in
manufacture and use. If they break
or are no longer needed their
materials and component parts
can be harvested to make
new products.
A circular economy
is an economy designed to
support closed loop activity.
It is an alternative economic model
for value creation and sustained
economic growth, providing an
environment which enables the
cycling of resources
to ?ourish.
4
6
In practice, products are not simply ‘closed
loop’ or ‘not closed loop’. A 100% closed
loop product can be reused in?nitely or
biodegrade perfectly back to nature, but
in reality most products are somewhere
along a spectrum. We will make the greatest
contribution at this stage by making more of
our products more closed loop.
We have initially identi?ed 90 products on
our shelves – largely from our existing
eco-ranges – that we believe could be
good closed loop candidates.
Across the Group, we have begun to develop
new and improved products with good closed
loop elements. We’re using our partnership
with the Ellen MacArthur Foundation to
drive forward new closed loop ideas and
measurement systems. We’ve already won
three prestigious awards from the UK’s
innovation agency, the Technology Strategy
Board, to support work in this area, that we
hope we will be able to share soon.
In order to achieve our closed loop ambitions,
we need to work in collaboration with
businesses, politicians, academics, innovators
and civil society. We have been instrumental
in helping establish the business case for
the circular economy through involvement in
major reports and the creation of new tools
to measure the value to business from closed
loop innovation. We’re founding members of
the European Resource Efciency Platform,
helping to shape EU policy to create the
right regulatory and business environment
to support a circular economy. To share what
we’re learning, and ?nd new collaborative
ways to solve shared problems, we’ve helped
create and activate the Circular Economy
100 – a network of companies, innovators and
regions aiming to accelerate the transition to a
circular economy.
CLOSING THE LOOP ON
OUR PRODUCTS
Included here are stories which demonstrate our progress and, we
hope, show others across our business and beyond, how they can
also help make progress towards closed loop innovation.
STORIES OF
PROGRESS
CLOSED LOOP
CALCULATOR
page 8
REMADE, THE PROCESS
THAT MAKES
INFINITE
page 9
CARRIERPAC
AND
LONGSPAC
page 10
RENTAL
AND REPAIR
SERVICES
page 13
MÉTISSE
INSULATION
page 11
RE-MINING
MATERIALS FROM
POWER TOOLS
page 12
ROLLING UP OUR SLEEVES
King?sher’s role: Today the heat and excitement of innovation are in
closing the loop on products and services. Ultimately, we want to see
a world where creating and using products wastes nothing – and by
2020 we want to have 1,000 products on our shelves with closed
loop credentials. We are playing two roles in helping close the loop:
We’re closing
the loop on our
products
We’re
accelerating
the transition
to a circular
economy
King?sher and the Ellen MacArthur Foundation
Our partnership with the Foundation has been central to our work to close the loop. In 2010,
B&Q ?rst became a founding partner to support the establishment of the Foundation. In
order to close the loops across our business, we’ve needed to go beyond B&Q and activate
the entire Group. This year, King?sher has become a global partner of the Foundation and
our partnership will continue to be at the heart of all our closed loop innovation work.
7
8 9
The challenge
Europe faces major waste and recycling issues:
35% of waste wood is still sent to land?ll
9
and only
25% of waste plastic is recycled
10
.
There’s been some progress. For example, by-
products from sawmills are already being recycled.
However, a lot of post-consumer waste, such as
pallets and packaging used in stores are harder
to recycle.
The innovation
We have brought together production, manufactur-
ing, retail and logistics expertise from across
the King?sher Group – part of our ‘One Team’
approach. In part, this has enabled us to draw on
our engineering expertise from across the Group
to take the design and manufacturing lead with
our external partners. We worked together with
the independent chemistry research centre,
Certech in Belgium, and in collaboration with the
waste recycler Veolia and composite wood
manufacturers Océwood, to create a new
engineering process called ReMade. Through
applying ReMade, we have developed an entirely
new composite material from the waste wood from
our stores and end of life DIY products. It’s used
in the hollow panel that makes up the core of the
new In?nite worktop.
We believe In?nite is a better product ofer for our
customers. It’s 30% lighter than similar products
on the market today and so is easier to handle
and install, thereby reducing breakages. Where
traditional particle boards are often damaged
by steam and surface water, In?nite has a wood
composite structure that is more water resistant.
By replacing the use of virgin source material and
harmful chemicals, our new engineering process
ReMade also reduces the product’s carbon
footprint and preserves natural resources.
The challenge
You can’t get more closed loop unless you know
how closed loop you are in the ?rst place. Up
until now there have only been very complicated
and time-consuming forms of measurement.
The challenge is to identify the key credentials
of closed loop products, ?nd a way to measure
them simply and identify where we are making
improvement. With an ambition of creating 1,000
products with closed loop credentials by 2020, we
need a tool that works at the scale of thousands –
not tens – of products.
YOU CAN’T GET MORE
CLOSED LOOP UNLESS YOU
KNOW HOW CLOSED LOOP
YOU ARE IN THE FIRST PLACE
The innovation
Our calculation uses 10 questions to measure
how closed loop a product is. Criteria include
what the product is made from, if it can be rented
or repaired and whether it can be disassembled
into component parts or materials. We have
determined that a product with ‘excellent’ closed
loop credentials will achieve a rating of above 75%
and a ‘very good’ product will rate above 55%.
Our initial assessment suggests we already have
90 products across the Group with some closed
loop credentials. For example, in Castorama
France we sell decking made from recycled
wood. The decking scores well on the calculator
but the calculator has also enabled us to see that
the next step in closing the loop on that product
is to capture the decking at the end of use and
repurpose it for a new life.
We’ve realised that the power of the calculator is
not just that we’ve identi?ed and can measure the
characteristics of a product but that it is quick and
easy for lots of people to use. At a Group level, we
can identify the progress we are making towards
our initial goal of 1,000 products. That’s why the
calculator now underpins all our innovation work
to close the loop. We plan to share the calculator
with suppliers and other businesses once it’s
fully tested within King?sher. It allows anyone in
a business to look at their products and how they
can be improved.
WE’VE REALISED THAT
THE POWER OF THE
CALCULATOR IS NOT JUST
THAT WE’VE IDENTIFIED
AND CAN MEASURE THE
CHARACTERISTICS OF A
PRODUCT BUT THAT IT IS
QUICK AND EASY FOR LOTS
OF PEOPLE TO USE
REMADE, THE PROCESS THAT
MAKES INFINITE
Castorama France is launching In?nite: the ?rst-ever worktop for
kitchens and bathrooms made from 100% waste sourced from both
our stores and ‘end of life’ DIY products.
CLOSED LOOP CALCULATOR
We have identi?ed 10 important credentials of closed loop products and
found a simple way to measure them – our Closed Loop Calculator. The
measurements taken underpin our ambition to close the loop, showing
us where to focus and the progress we’re making.
“ The Closed Loop Calculator will be a very important tool to
help King?sher close the loop on their products. It provides
the foundations for all of King?sher’s work around closed
loop innovation, enabling the business to establish a
baseline, identify where to take action, and to pin-point the
progress they’re making to close the loop on their products.”
THE INNOVATOR CHRIS TUPPEN
ADVANCING SUSTAINABILITY
“ It’s my responsibility to bring an industrial approach to the development of our products.
To imagine, create, design and build this new product from scratch has taken a
whole team of people from across the entire King?sher Group. It’s been a
great opportunity to work as ‘One Team’, to share our ideas and beliefs,
and combine our passion and expertise to make this a reality. For us,
this is more than just a worktop and far more than just another
recycling solution. It demonstrates how we can bring our
engineering and retail expertise together from across the Group
to take leadership and operate as ‘One Team’. It’s our ?rst step
to make more of our products closed loop and generate the
con?dence we need on our journey to become Net Positive.”
THE INNOVATOR ONE TEAM FACILITATED BY CHRISTOPHE GUYADER
KINGFISHER – COMPONENT AND MATERIAL DEVELOPMENT DIRECTOR
10 11
The challenge
The phenomenon of fast fashion is seeing people
buy more clothes, more frequently and throw more
of them away. In France, each person bins an
average of 12kg of clothing every year
11
. Many of
those clothes are of low quality, making it harder
to salvage, clean and resell them.
THE PARTNERSHIP WITH
LE RELAIS ALLOWS US
TO CLOSE THE LOOP IN
WAYS THAT WE COULDN’T
ACHIEVE WITHOUT ITS
INFRASTRUCTURE
The innovation
Customers at Castorama can now dispose of old
clothes, shoes, linens and small leather goods in
containers outside some stores. They are part of a
network of 16,000 containers run by our partners
Le Relais. In 2012, they collected a total of 90,000
tonnes, 55% of the entire nation’s textile recycling.
The partnership with Le Relais allows us to close
the loop in ways that we couldn’t achieve without
its infrastructure. Le Relais has the innovative
techniques to sort the textiles by their condition
and quality. 55% are cleaned and resold, 10%
turned into wiping cloths, 25% pulped and
returned to simple ?bres and the remaining 10%
that cannot be recovered are used to generate
energy for the factories. The newly created ?bres
are then processed to create panels, rolls and
?akes of a new material or ‘wool’ that possesses
excellent thermal and acoustic insulation
properties from which we make the Métisse
product range of insulation products.
Métisse is a better product than many current
alternatives. It insulates from both cold and hot
weather and is highly ?re-resistant. In addition,
Métisse overcomes some of the
longer-term problems
of deterioration
sufered by
alternatives such
as mineral wool.
The challenge
Signi?cant levels of packaging are required to
deliver high-value kitchen products to a customer’s
home without damage. The smallest dent, scrape
or scratch is likely to mean customers reject the
products. Rejects increase our costs, increase
waste and decrease customer satisfaction, while
the packaging itself is costly for the business and
contributes hundreds of tonnes every year to
household waste streams.
The innovation
A natural approach to this challenge would be to
add more packaging to reduce damage. However
at B&Q UK, we decided to step back and rethink
the entire approach to the delivery of large, fragile,
high-value kitchen items including worktops,
pelmets, plinths and cornices. To do so, we have
joined forces with WRAP, consultants Outpace and
our suppliers Storsack Dorton Ltd (now Greif) and
Kayserberg Plastics.
Inspired by the simplicity and reusability of pizza
delivery bags, the team created large padded
polypropylene sacks designed to safely transport
large fragile items. These are known as Carrierpac
and Longspac, depending on the product they
are designed to carry. The packaging, itself made
from at least 25% recycled plastic, is designed to
be reused: the delivery teams take the products
into the customer’s property, slip them out of the
protective, padded pack and then take these away
for use in another delivery.
Having been used up to 80 times, the covers are
retired, baled up and packed of to our recycling
partners and given a second life as polypropylene
wheels on supermarket trolleys or as bollards in
car parks.
By rethinking the system in which these deliveries
take place, we’ve been able to make a real impact.
250,000 large kitchen items are now transported
in the packaging every year, with the number of
products damaged during transit reduced from
6% to 0.75%, meaning happier customers, far
fewer returns and less raw materials used. Since
customers aren’t left with waste to dispose of, the
new packaging system improves their experience,
whilst also saving 2,500 tonnes of cardboard
every year. All in, closing these packaging loops
results in a combined saving of over £1 million a
year for the business.
MÉTISSE INSULATION
Castorama France is working with its partner Le Relais to create
value out of customers’ waste textiles – by taking them back and
remanufacturing them into thermal and acoustic insulation products
that are being sold in 38 stores across France.
CARRIERPAC AND LONGSPAC
B&Q UK has created an award-winning reusable packaging system for
large kitchen products that reduces product damage during delivery
?ve-fold, saves £1 million for the business and reduces cardboard
packaging by 2,500 tonnes every year.
“ Only through working in partnership with Le Relais have we been able to close the loop.
As the ?rst large retailer to stock Métisse, we are playing an important role by providing
the market for these products. This is also a local way of closing the loop, which means
the production supports the local economy and we can proudly carry the ‘Made in France’
insignia, enabling us to respond to one of the growing demand trends from our customers.
One of the great hidden bene?ts is that Le Relais is also making a real diference in society.
They’re a social enterprise employing 2,200 people, most of whom might otherwise be
excluded from employment.”
THE INNOVATOR PIERRE ROYER
ECO-PRODUCT MANAGER CASTORAMA FRANCE
“ I’m responsible for improving the processes and procedures
in all our multi-channel packaging systems. To come up with
the solution, we needed to go back to the drawing board.
Reimagining the delivery system led us to create an entirely
new approach that could close the loop. We found that the
only way to do this successfully was to collaborate at each
stage with our suppliers and partners such as WRAP.”
THE INNOVATOR KEVIN CORBY
B&Q BUSINESS IMPROVEMENT MANAGER
12 13
The challenge
Returned power tools that can’t be repaired,
cleaned and resold are currently sold for scrap.
As scrap, it’s difcult to know what happens to the
component parts and materials, and how much is
actually harvested and given a second life. The
real value, both ?nancially and environmentally,
comes from breaking down the tools into separate
streams of metals, plastics and component parts
and ?nding a way for them individually to be
cycled back into new products.
The innovation
We have formed a partnership with the ful?lment
and reverse logistics company iFORCE to break up
power tools collected in Screw?x stores. Recovery
experts break down power tools at the rate of
about six per hour, dividing component parts into
ten diferent streams including three metal types,
four plastic types and others such as cables, plugs
and motors. Each stream is then sold to speci?c
companies who repurpose the materials or parts.
Some of the plastics come back into our stores for
sale. For example, the rubble bags made by NDC
Plastics are made up of at least 10% of feedstock
from our old power tools.
Now we have the partnership and infrastructure in
place, the next step is to scale up the operation by
increasing the volume and types of tools we break
up. Our customers will soon be ofered vouchers
to return old and faulty power tools, lawnmowers
and strimmers – an incentive to customers and a
way of increasing volumes.
Currently our ‘harvesting’ works efciently and
is cost neutral to the company. It will take two or
three years to start turning a pro?t, so we’re taking
the long-term view that this is part of the entire
business rather than isolated in just an individual
product line or department.
RE-MINING MATERIALS FROM
POWER TOOLS
Screw?x UK has begun ‘harvesting’ materials from used and damaged
power tools, extracting valuable parts, plastics and metals to create new
revenues from traditional waste streams.
The challenge
Many people own DIY products but use them only
infrequently and for a short amount of time. The
use of the resources in these products is inefcient
and when they do break or cease to be useful
there often isn’t the system in place to repair or
recondition them.
This comes at a time when consumer models of
sharing, lending, gifting, swapping and bartering
are emerging. The challenge to business is to
adapt to alternative models and ensure continued
economic growth.
The innovation
Since Castorama opened in Poland 16 years ago,
we have always had a repair centre in store. We
introduced rental centres to the business about
eight years ago. Today all of our stores in Poland
have repair centres, and half ofer rental services.
The repair operations are equipped to test lawn
mowers and other products with combustion
engines and to test panels for lights, as well as
tools such as drills and jigsaws.
Over the past 16 years, the scope of services
we’ve ofered has evolved in line with our
customers’ changing needs. Today we are no
longer just an equipment drop of point, but are
equipped to do a host of other things such as
drill holes in sinks, sharpen chainsaws and cut
replacement keys.
It’s through creating partnerships with suppliers
that we have been able to make these services
possible. Suppliers now design products for rental
that are tougher, work for longer and are more
easily ?xed by authorised professionals. We’ve
been able to improve the quality of tools for our
customers, reduce breakages and ultimately make
our entire supply chain far more closed loop.
In 2012, we completed nearly 140,000 repairs and
4,000 equipment rentals. By ofering these new
services, we have increased footfall in our stores,
built stronger customer relationships and found
more opportunity to provide customers with other
products. In the last few years, we have begun to
extend our services to include classes in store for
school children aged 6–12 who come in to have
fun through learning practical DIY skills such as
woodwork, gardening and decorating.
RENTAL AND REPAIR SERVICES
For the last 16 years, Castorama Poland has been closing loops in its
business by providing repair and rental services. Its experience can
help other businesses across the Group who see the opportunity in
implementing these services.
“ Growing our rental and repair services organically has meant
we’ve been able to adapt and respond relatively easily to
bigger trends when they emerge. Today, for example, more
people are hiring contractors to improve their homes – but
to keep the costs down, we’re seeing that they’re coming
to us to rent the tools to give to their contractors, creating
major new demand for our rental equipment.”
REPRESENTING THE INNOVATORS MILENA HAGEMAJER
CORPORATE SOCIAL RESPONSIBILITY COORDINATOR
CASTORAMA POLAND
“ We’ve been looking at the costs to our business of getting rid of
waste such as old, broken or returned tools. A lot of our waste
is full of the same raw materials that we need to buy to produce
our own products. It raises a bigger question we all need to
ask: when is waste actually waste? As soon as someone
doesn’t want something we mentally label it ‘waste’ but
actually it’s a potential collection of new resources. From this
perspective we can start to imagine how customers can
become the source of our resources.”
THE INNOVATOR PETER HARRIES
QUALITY MANAGER SCREWFIX
Powering Kingfisher towards
a portfolio of closed loop
retail products
Key
Repurpose Use
Produce
G
a
i
n
i
n
g
m
o
r
e
c
u
s
t
o
m
e
r interactio
n
s
f
r
o
m
n
e
w
s
e
r
v
i
c
e
s
U
s
i
n
g
l
e
s
s
c
o
m
p
l
e
x
m
aterials to
e
n
a
b
l
e
e
a
s
i
e
r
r
e
-
u
s
e
How it works in practice:
Produce
Designing for disassembly:
King?sher is working with partners
on designs for easier dismantling
and waste-reduction.
Re-engineering materials:
Métisse insulation made from
used textiles, Castorama France.
Simpler source materials:
20 types of plastic in an average
power tool – a number we’re
looking to reduce.
Use
Renting and repair: Repair
services in all Castorama Poland
stores, rental in half.
Repurpose
Harvesting: Screw?x’s partnership
with iFORCE dismantling six power tools
an hour.
Customer mining: Screw?x’s customers
incentivised to return used power tools.
Re-birth: B&Q’s award-winning packaging
for kitchen worktops recycled as
polypropylene wheels or bollards.
4
Renting
and repair
3
Simpler
source
materials
R
e
m
o
v
i
n
g
p
ro
duct pa
rts
f
o
r
r
e
-
u
s
e
I
n
c
e
n
t
i
v
i
s
i
n
g
p
r
o
d
u
c
t
r
e
t
u
rn
s to m
a
x
im
is
e
h
a
r
v
e
s
t
e
d
r
e
s
o
u
r
c
e
s
S
e
p
a
r
a
t
i
n
g
a
n
d
r
e
-
e
n
g
in
eering m
a
t
e
r
ia
l
s
f
o
r
a
s
e
c
o
n
d
l
i
f
e
6
Customer
mining
7
Re-birth
5
Harvesting
1
2
3
4
5
6
7
P
r
o
t
e
c
t
i
n
g
b
u
s
i
n
e
s
s
from mate
r
ia
ls
p
r
i
c
e
v
o
l
a
t
i
l
i
t
y
2
Re-
engineering
materials
C
r
e
a
t
i
n
g
n
e
w
d
e
s
igns for q
u
ic
k
d
i
s
m
a
n
t
l
i
n
g
1
Designing for
disassembly
16 17
100
ACCELERATING THE TRANSITION
TO A CIRCULAR ECONOMY
Here are ?ve stories which demonstrate our progress and, we hope,
show other businesses how they can contribute to an environment
which enables closed loop innovation.
STORIES OF
PROGRESS
CIRCULAR
ECONOMY
100
page 18
EUROPEAN
RESOURCE
EFFICIENCY
PLATFORM
page 19
B&Q YOUTH
BOARD
page 22
NET POSITIVE
IMPACT MEASURE
FOR INNOVATION
page 20
‘TOWARDS THE
CIRCULAR ECONOMY’
REPORTS
page 21
17
“ CLOSED LOOP INNOVATION
CAN CUSHION BUSINESS
FROM PRICE VOLATILITY,
PROVIDE US WITH
COMPETITIVE ADVANTAGE
AND ENABLE US TO BUILD
BETTER RELATIONSHIPS
WITH CUSTOMERS AND
SUPPLIERS.”
IAN CHESHIRE
KINGFISHER’S GROUP CHIEF EXECUTIVE
18 19
The challenge
A large number of people, across diferent
parts of the supply chain, industry sectors and
geographies, from designers to academics,
CEOs to city mayors, are working to make the
economy more circular. The circular economy –
and King?sher’s closed loop ambitions – cannot
be achieved working in isolation. It requires
complementary expertise and capabilities to work
well together and we must ?nd collaborative ways
to overcome barriers to progress.
Our action
We took this challenge to our partners at the
Ellen MacArthur Foundation, with an idea to
bring the right people together to close the loop
faster and at greater scale. With their support,
guidance and leadership, we have co-created the
Circular Economy 100, or CE100. It is a platform
for companies, emerging innovators and regional
leaders to share best practice, build networks and
collectively solve the problems we face in moving
to a circular economy.
The platform fosters the opportunity to network
with other CE100 members to explore challenges
and solutions and form research partnerships. One
key CE100 component is the network of ‘emerging
innovators’ – new technology businesses, many of
which hold the key to unlocking innovation barriers
to circular progress.
In addition, members of the CE100 have access
to the body of knowledge and experience of
the Ellen MacArthur Foundation and its founding
partners. Acceleration workshops form part of the
learning aspect of the CE100 platform. These two-
day workshops aim to address common barriers
and challenges of taking the circular economy
to scale as well as updating the group on core
circular economy topics, best practices and
emerging trends to ensure that everyone in the
CE100 has the latest ideas at their ?ngertips.
THE CIRCULAR ECONOMY –
AND KINGFISHER’S CLOSED
LOOP AMBITIONS – CANNOT
BE ACHIEVED WORKING IN
ISOLATION
The CE100 was launched at the World Economic
Forum at Davos in February 2013. In the last six
months it has already attracted 46 members. The
aim is to measure the success of the CE100 over
the next three years by the number of projects
generated from the network, the material cost
saving made, and the value created for the
businesses and the wider economy. If you are
interesting in joining, you can sign up at
www.ellenmacarthurfoundation.org/business/ce100
The challenge
In many cases the solutions for a circular economy
already exist. Yet sometimes the systemic
conditions, accounting principles and legal and
regulatory processes stand in the way of making
those solutions a reality. These barriers to a
circular economy cut across multiple policy areas
and diferent interest groups. Only by getting the
enabling conditions right can the solutions be
taken up at scale and more solutions imagined.
Our action
The European Resource Efciency Platform is a
group of about 30 members driving towards a
new and more resource-efcient economy. Ian
Cheshire, King?sher’s Group Chief Executive,
supported by Rosie Donachie, King?sher’s
European Afairs Manager, have been active
participants on the platform, alongside members of
the European Parliament, ministers, other business
CEOs, academia and representatives of trades
unions, NGOs and civil society – all key actors in
making a shift towards a more circular economy.
An important success for the Platform has been
to introduce the principles of a circular economy
at the European policy level. This has meant
challenging the European Commission, its member
states and private sector audiences to think not
simply about reduction strategies (in terms of
waste, energy consumption, emissions etc), but
also about encouraging sustainable sourcing,
new business models and the use of by-products
as raw materials, in an efort to switch to a
regenerative economy.
THE CIRCULAR ECONOMY
HAS THE POTENTIAL TO
CREATE GROWTH AND
GENERATE BETWEEN
1.4 AND 2.8 MILLION
JOBS ACROSS THE EU
The Platform members support the potential of
the circular economy to create growth in the
European Union, generate between 1.4 and
2.8 million jobs across Europe and deliver
competitive advantage
12
.
The Platform has launched two important policy
orientation documents and all members have
agreed to advocate for the policy framework
recommendations within them. Speci?cally, it has
given fresh impetus and endorsement for us to
hunt down the business opportunities to create
more and more closed loop products and services,
thus contributing to the development of efective
material ?ows.
THE CIRCULAR ECONOMY 100
We are helping to establish the Circular Economy 100 – an Ellen MacArthur
Foundation platform that connects the people and organisations that,
collectively, are able to solve challenges, build and share knowledge and
collaborate, to accelerate a transition towards a circular economy.
EUROPEAN RESOURCE EFFICIENCY
PLATFORM
Our active role in the European Resource Efciency Platform has helped
to shape a new policy direction: from a drive for resource efciency to
an ambition to create a more circular economy in Europe, and with it, a
new route to competitiveness for European economies.
“ We’ve found that there are surprising common challenges
and barriers that people face when taking the circular
economy to scale. More value can be gained from collective
problem solving than can be achieved by working alone.
Beyond being a founder and instigating agent for CE100,
King?sher has helped lead the way… a bit like a mentor for
the new companies, they have been able to share their best
practice, ideas, and challenge new partners to think diferently.”
STUART WHITMAN
DIRECTOR OF THE CIRCULAR ECONOMY 100
“ In a world with growing pressures on resources and the environment, the EU has no
choice but to go for the transition to a resource-efcient and ultimately regenerative
circular economy. Our future jobs and competitiveness as a major importer of resources
are dependent on our ability to get more added value, and achieve overall decoupling,
through a systemic change in the use and recovery of resources in the economy.
According to the OECD, this could lead to steady economic growth with business
opportunities across the whole economy.”
MANIFESTO FOR A RESOURCE-EFFICIENT EUROPE
EUROPEAN RESOURCE EFFICIENCY PROGRAMME DECEMBER 2012
20 21
The challenge
Closed loop thinking is a compelling idea, and
presents a signi?cant opportunity: research
from the Ellen MacArthur Foundation and
McKinsey & Company has identi?ed that the
fast-moving consumer goods industry could save
US$700 billion per annum by transitioning to a
more circular way of operating
13
. For businesses
to sustain momentum, however, it is important
to demonstrate tangible commercial and
environmental bene?ts from closed loop activities.
Our action
We have joined forces with Advancing
Sustainability, experts on metrics and
measurement, and the Ellen MacArthur Foundation
to start to measure the ?nancial and environmental
impact of closed loop activity in businesses.
Two models are at the heart of this approach
– one ?nancial and one environmental.
These measure the efect of changes in the
business resulting from closed loop principles
on King?sher’s environmental and ?nancial
performance. For example, the ?nancial model
looks at changes to supply chain costs, sales of
goods, revenues from services and the bene?ts
of harvesting material from waste, in order to
calculate the total ?nancial value accruing to
King?sher from a particular closed loop activity.
This approach is designed to create a quick, but
technically robust and credible measure. We have
found ways to minimise the number of inputs
needed from our colleagues in the business and
have been clear about the assumptions made in
building and using the model. We plan to open-
source the approach so that, after testing within
King?sher, it can become a valuable tool across
other businesses.
This approach is important because it will allow
us to credibly communicate the bene?ts of closed
loop activity within our business and engage
colleagues from across various departments,
partners and suppliers. It will allow us to measure
progress towards our Net Positive ambition to
have a positive impact on the world. Beyond
King?sher, we believe that the application and
communication of our ?ndings will help to motivate
other businesses to adopt more closed loop
principles.
The challenge
The circular economy is an idea about global
economics – a major part of which is rethinking
how to do business in the future. When the Ellen
MacArthur Foundation started, the rationale, the
facts and the arguments for the bene?ts of this
approach weren’t fully formed. To encourage
faster adoption, a case needed to be made
that quanti?ed the economic bene?ts of circular
business models and laid out pathways for action.
Our action
Part of the appeal of becoming a founding partner
of the Ellen MacArthur Foundation was to create
the intellectual underpinnings for the idea of the
circular economy – why it is so important, how
business should approach it and what the bene?ts
would be of getting it right.
Central to this thinking are two reports published
by the Ellen MacArthur Foundation with analysis by
McKinsey & Company. They are the ?rst reports to
establish a clear framework and economic case for
a transition to a circular economy and have rapidly
gained the attention of business and government.
These were launched by Ellen MacArthur and Ian
Cheshire, King?sher’s Group Chief Executive, at
the World Economic Forum events in Davos in
2012 and 2013.
The ?rst report sought to make the macro-
economic case for closed loop thinking. It
highlighted an annual US$2 trillion opportunity
globally in net energy and material cost savings
for companies by adopting circular economy
principles. The second report analysed the
fast-moving consumer goods (FMCG) industries
that account for about 60% of total consumer
spending, produce 75% of municipal waste and
absorb more than 90% of our agricultural output.
The ?ndings were that the adoption of the
circular economy could be worth as much as
US$700 billion in material savings to the FMCG
industries alone.
THE REPORTS ESTABLISH
A CLEAR FRAMEWORK
AND ECONOMIC CASE FOR
A TRANSITION TO A
CIRCULAR ECONOMY
The World Economic Forum has been so enthused
by the circular economy concept that it has been
involved in shaping a third report, which will launch
at Davos in 2014. This report, to which we’ve
been active contributors, will set out some of the
learnings and practical examples of progressive
companies like ours and is speci?cally focused on
supply chains.
The reports are available free to download on the
Ellen MacArthur Foundation website.
NET POSITIVE IMPACT MEASURE
FOR INNOVATION
We are creating an approach to measure the ?nancial and
environmental value generated from closed loop innovation within our
business, which will be reported through Net Positive and will show what
can be achieved by making these principles a reality.
‘ TOWARDS THE CIRCULAR ECONOMY’
REPORTS
As founding partners of the Ellen MacArthur Foundation we have been
instrumental in helping establish the economic case for the circular
economy. We continue to drive this thinking – with a contributing role
in an upcoming third report from the Foundation.
“ The Ellen MacArthur Foundation has identi?ed a huge macro-
economic opportunity in a circular economy, but it’s important
for us as a business to be able to measure how much of that
opportunity we’re managing to grasp – that’s what this impact
measure is about. If we can identify positive ?nancial and
environmental impact from our own activities we’ll really start
growing momentum and will be able to put extra weight
behind it in our business.”
BECKY COFFIN
HEAD OF STRATEGY AND PERFORMANCE
NET POSITIVE KINGFISHER
“ MacArthur has taken a number of ideas… and brought them together under one
over-arching idea, the circular economy. The masterstroke, though, has been to bring
the analytical skills of global management consultancy McKinsey to bear by putting
real ?gures on what can be achieved, rather than relying on the idea on its own to
be compelling.”
JO CONFINO
THE GUARDIAN PUBLISHED IN THE GUARDIAN, JANUARY 2013
22
The challenge
Closed loop thinking is a challenge – on any given
product, let alone for a whole economy, it involves
imagining a new way that established systems
could work. The problem we too often face is that
our thinking can be constrained by the current
state of afairs. If we’re not careful, we’re too
conditioned by our previous experiences. Making
closed loop a reality requires new eyes looking at
old ideas, and fresh minds inspiring new solutions.
Our action
We asked students from across the UK to apply
to join the Youth Board, with a written application
based on the question: ‘In September 2009 the
Harvard Business Review stated: “We ?nd smart
companies now treat sustainability as innovation’s
new frontier.” Why might that be?’
Nine 16-18 year-olds were selected and tasked
with exploring how B&Q, and the retail sector
more broadly, needs to change in the face of rising
material and energy prices and the increasing
cost of waste disposal. In essence, they had to
imagine B&Qs business model of the future. The
Youth Board chose to concentrate on exploring
how B&Q could create a new take-back business
model and thereby help to eradicate waste, both
in the production and at the end of a product’s life.
The Youth Board was mentored by members of
the B&Q Board, and ?nal recommendations were
presented to the entire B&Q Board, King?sher’s
Group Chief Executive Ian Cheshire and Dame
Ellen MacArthur. The Youth Board identi?ed a
number of possible product ideas, one of which is
in development with B&Q UK. The Youth Board will
meet annually for the next ten years, to continue
to challenge our progress. A few members have
already been back to focus on speci?c work-
streams, and we expect more great ideas to come.
The value of a youth board is being recognised
by other major businesses including The Co-op,
which is creating a youth board to help them
rethink their own business. We have been keen
to share some of our learning with them, and will
soon be launching a Youth Board Toolkit to help
other businesses adopt this approach.
B&Q YOUTH BOARD
In partnership with the Ellen MacArthur Foundation, B&Q UK appointed
a group of 16-18 year olds – our ‘Youth Board’ – to be a source of fresh
and challenging thinking on how B&Q could be more circular. It has led
to award-winning ideas and a group of brilliant young people who see
the world a little more circularly.
“ The great thing about the Youth Board is that you come at the
business from a diferent angle. When you’re that age you see
the possibilities, and have an invincible con?dence in the
future – but also ask some tough questions that maybe
people in the business have stopped asking.”
DAMIAN MCGLOUGHLIN
RETAIL DIRECTOR B&Q UK AND IRELAND
WHAT OUR FIRST
STEPS HAVE
SHOWN US
We have a
vision of a world
where making and
using products
wastes nothing
Making headway towards this vision is
critical for us as a business, and for the
world at large. The stories here show
that we have started to lay down some
solid foundations and make some
important ?rst steps on that journey –
both of which are de?ning our direction
of travel. We are learning all the time,
discovering new ways of operating.
Some work and some don’t, but in
success and failure, here are some of
the things we have learned.
23
24 25
l Take on iconic products
Focusing our energies on closing the loop
on one of the most iconic products in our line
of business – the power tool – has attracted
the most interest and attention. We’ve found it
sparks people’s imagination and brings fresh
excitement and in?uence to the table.
l Keep sight of the opportunity
Ellen, and the Ellen MacArthur Foundation,
continually inspire us with their sense of
optimism and opportunity. They have shown
us that treating the circular economy as an
opportunity, rather than a risk, motivates
people to action.
l Look ahead for motivation
In seeking to bring others on the journey
with us, we’ve found there are few more
powerful ways than looking ahead to our
future. It helps us recognise that if we want to
give our children a chance to have better lives,
we simply must ?nd a way to adapt to welcome
an additional three billion more middle-class
consumers by 2030.
l Use nature for closed loop inspiration
Nature is a closed loop system and has been
for billions of years. Mimicking the form,
movements and systems of nature – called
biomimicry – has been a founding thought,
and a source of inspiration, on our closed
loop journey.
l Demonstrate the value created
Our ideas and innovations have gained extra
traction when we’ve been able to pin-point
value to the business. You shouldn’t be afraid
to focus on this more hard-nosed angle of
closed loop.
l Identify how you’ll show progress
By de?ning a set of closed loop credentials,
and models to measure the environmental and
?nancial value we will create, we’ve been able
to identify where to take action and to start
demonstrating our closed loop progress and
the business value.
l Mark success in steps, not perfection
We have found that we achieve more by trying
to improve closed loop credentials across
multiple product lines than aiming for one 100%
closed loop product. We’ll get there in time, but
our impact today will be through learning how
to close many diferent loops and taking that to
scale across our business.
l Embrace the need to change
Closed loop is a fundamental change to our
way of looking at the world. To make it a reality,
people from across the business have had to
recognise the need for a new approach and
not simply tweak the current way of doing
business.
l Identify your advocates
We have found a set of people in the business
with passion and excitement for the idea of
closed loop innovation. Getting these people
involved has inspired others in the business
and drawn them in to the approach.
l Find learning through failure
Like anyone venturing into the unknown,
we’ve made our fair share of mistakes and not
all of our ideas have made it to reality. We’ve
found this to be part of the journey in the right
direction, and our mistakes have often opened
the door to discovering what actually works.
l Reimagine products from ?rst principles
Only by taking our products back to the
drawing board have we been able to identify
how to close some important loops, including
selecting the right source materials and
designing for repair and disassembly.
l Look for resources in your ‘waste’
We are realising that ‘waste’ isn’t always
‘waste’ – it’s a resource from which we can
harvest materials and parts to reuse, renew
or repurpose. It enables us to source from
our customers the resources we would
otherwise need from a mine or forest on the
other side of the world.
l Find the most important loops where you
can have most impact
Not all loops are as easy or as important to
close as others, so we’ve chosen the products
and loops where we can have the most impact.
For us, this has meant prioritising our own-
brand products, where we have responsibility
for disposal at the end of the life, as well as
loops with higher-value materials and the right
volumes to make it efcient to close them.
l See products within the wider
business context
Thinking beyond just the product’s
composition, we’ve been able to look at how
we sell products as a business and explore
ways to create other business services, such
as repair or rental options, to make the product
more closed loop.
l Don’t rule out new business practices
Through the lens of current business thinking,
some new ideas and opportunities appear
incompatible or not sufciently pro?table. By
digging into new business models, we’ve
found ways in which they can work, such as
new rental services that can lead to more
customer interactions and new opportunities
for us to do business with them.
l Break down the internal silos
The greater the collaboration across diferent
parts of the business, the more we’ve been
able to look for closed loop opportunities
across the entire value chain, avoid con?icts of
interest and make our ideas a reality.
l Give space for innovation
New innovation has been enabled by giving
people freedom. Perhaps best exempli?ed by
Carrierpac, new approaches have come by
thinking through problems in a new way – and
outside the constraints of usual approaches.
l Design new models for supplier
relationships
Closing the loop on some of our products has
led us to thinking diferently about how our
supplier relationships might work in the future.
For instance, we’re exploring a rental
payment to suppliers, to align incentives
around new rental models.
l Hunt down expertise beyond your walls
We often have to look outside our own
business to other businesses, suppliers,
inventors, scientists and customers to identify
the skills, techniques, systems and advice
we need to go closed loop. This is how our
approach is driving collaboration.
l Look at the diferent loops out there
There are many types of loops within the
circular economy – those you own, those
that you can share with others, those which
return the same material and those where an
upcycled or degraded material is the output.
We’ve tried to explore which type of
loops works best in each case, and how
to make that a reality.
Making the vision
a reality
Developing closed
loop products
Laying the
foundations
Creating the right
environment
27
In particular, we encourage you to sign up to the
Ellen MacArthur Foundation’s Circular Economy
100 – a source of ideas and practical expertise
which gives you access to a network of leaders
in this area.
Higher resource price volatility
can dampen economic growth
by increasing uncertainty,
discouraging business from
investing and increasing the
cost of hedging against
resource-related risks.
We would encourage policy makers to: consider
the opportunity presented by the circular
economy; understand what the EU’s Resource
Efciency Platform recommendations mean for the
UK; and to be open to engaging with businesses
as they transition towards more circular ways of
working and begin to understand some of the
policy barriers hindering more circular business.
SUPPLIERS & PARTNERS
As the stories in this booklet show, closing the loop
on our products and building a circular economy
cannot happen without collaboration. We invite
all our suppliers to work with us to create and
implement new innovations that will close the loop.
POLICY MAKERS
Closed loop educational courses
King?sher employees have the opportunity to
sign up to these courses, each delivered by our
partner, the Ellen MacArthur Foundation:
l Executive Education introductory course:
run three times a year, places are available on
a six-week distance-learning course about the
circular economy and its practical business
application.
l Postgraduate Certi?cate: a programme to
explore the implications for business, community
and education of moving from a linear, take-
make-dispose, economy to a circular economy.
l MBA: delivered with Bradford University School
of Management, this new course combines
classic areas of strategy, ?nance and marketing
within a circular economy framework.
Net Positive One Team Leaders
Academy module
As part of the King?sher One Team Leaders
Academy, we’ll be running a series of sessions
designed to support awareness, understanding
and action around Net Positive within King?sher.
Closed loop will be one of the themes explored.
Each participant will be tasked with committing
to practical ways in which they can help the
business have a positive impact. The programme
will start in 2014.
King?sher’s Game of Risk
A board game has been created speci?cally for
commercial teams interested in learning about
the economic potential of a circular economy.
Through a game, players are immersed in the risks
presented by resource scarcity and current linear
business models, and are challenged to
identify and make the right decisions that
lead to closed loop opportunities.
The game, invented by
James Walker, King?sher’s
Head of Innovation, will
be available from early
2014 and can be used
at team away-days.
COLLEAGUES
We hope that in reading these stories you’re inspired to get involved
in making our business more closed loop. Wherever you are in the
business, we hope you will ?nd practical ways to join in – because to
achieve our targets we will need ideas and action across the entire
business. Here are a few suggestions of how you might get involved:
“ I’ve completed Bradford University’s postgraduate certi?cate
in the circular economy and have signed up to do the MBA
starting this year. Closing the loop really matters, and can
make a huge diference to the business but let’s face it –
it’s not an easy concept to grasp or communicate. The learning
opportunities have proved invaluable, helping me to develop
and deliver closed loop strategies.”
GIN TIDRIDGE
SUSTAINABILITY SPECIALIST B&Q
Colleagues
Suppliers &
partners
Policy makers
CALL
TO ACTION
The transition to the circular
economy, and the creation of more
closed loop products, will not occur
without widespread change.
We require action and collaboration
to make this happen at the scale
that is needed.
26
28 29
NET POSITIVE
Net Positive is a new approach to doing business. To succeed,
business must do more than minimise its negative impact – it must
be designed to have a positive impact on the world.
At King?sher, we help millions of people each week to improve their homes. As a leading
international retailer we have the scale and capability to create not just better homes and better
lives, but also a better planet.
In practice, Net Positive means not just preventing deforestation, but working towards net
reforestation. It means helping create homes that go beyond zero carbon to become generators
of their own energy. It means innovating new business models, products and services that are
net positive by design. It means working in communities to equip people with the fundamental
practical skills of making and mending. In each of these four priority areas, and across the
business, we will transform the way we operate to become Net Positive by 2050.
It is a big ambition. For many years we have worked to become more sustainable and with
Net Positive we are setting our sights even higher. We have established clear milestones and
will report regularly. We know that it’s a constant journey and aim to make progress every day
through the actions of colleagues and customers.
Net Positive will be good for our business. It will enable us to secure the resources that we use,
unlock new opportunities and to drive growth. We believe this big goal will inspire people in
our business – and has the power to be the catalyst for collaboration in the wider world of our
partners and the industry at large.
Today, the system is broken: the use of resources worldwide is outstripping supply. Leadership
for the future means having the resolve to envisage new approaches and take people with you.
For us, that means going Net Positive.
Footnotes
1 World Wildlife Fund for Nature: http://www.oneplanetliving.
org/index.html
2 The Organisation for Economic Co-operation and
Development: The Emerging Middle Class, OECD Publishing,
2009
3 Boston Consulting Group report, commissioned by
King?sher, 2011
4 Based on B&Q material sourcing and sales data 2009-2012
5 Harris Brushes
6 StEP: Solving the E-waste problem http://www.step-initiative.
org/index.php/Initiative_WhatIsEwaste.html
7. ‘Towards the Circular Economy’, a report by the Ellen
MacArthur Foundation with analysis by McKinsey &
Company.
8 ‘More jobs, Less Waste’, Friends of the Earth Report, 2010
9 ‘Le bois de recyclage’: Reboul, Louis; Federec Palettes a bois
presentation, Pollutec Exhibition 2012
10 EU Report, Facts & Figures, ValorPlast: http://www.valorplast.
com/Front/recyclage-plastiques-europe_428.php
11 Le Relais, www.lerelais.org
12 ‘Macroeconomic modelling of sustainable development
and the links between the economy and the environment’
(2011), GWS for the EU Commission, cited by the European
Resource Efciency Platform
13 ‘Towards the Circular Economy’ Report by the Ellen
MacArthur Foundation with analysis by McKinsey &
Company.
Credits
Writing: Blaise Projects
Design: www.theayres.co.uk
Print: www.scanplus.co.uk
ISO14001 certi?ed
Printed on Cocoon Silk, a coated
recycled paper manufactured using
a totally chlorine free process and
certi?ed as FSC® 100% recycled.
Alex Duf has managed
the partnership between
King?sher and the Ellen
MacArthur Foundation since
its onset in 2010. During this
time Alex has established
and runs King?sher’s closed
loop working group; designed
and project manages B&Q’s
Youth Board; provides editorial
advice and case studies for the
Foundation’s macro-economic
reports; is responsible for
communicating King?sher’s
closed loop progress and Net
Positive aspirations; and, most
recently, has been working to
understand the policy barriers
hindering more circular business
and how we might engage the
UK Government to overcome
these hurdles.
alex.duf@king?sher.com
James Walker is the driving
force behind King?sher’s closed
loop innovation and has played
a central role in the creation of
many of the projects currently
taking place. He is working
extensively throughout the
Group to engage commercial
and innovation teams with the
closed loop agenda, as well
as identifying new external
partners to make these projects
a reality. His ongoing work with
these internal teams saw him
mastermind ‘King?sher’s Game
of Risk’. James has already
secured three Technology
Strategy Board awards and
funding, which has provided
the springboard for a number of
innovative projects that are now
in early stage development.
james.walker@king?sher.com
Matt Sexton has been central
to the creation of King?sher’s
Net Positive approach to
business which is intrinsically
linked to core business strategy.
Innovation is one of four pillars
on which Net Positive proudly
stands. Matt has challenged
the business to stretch itself
with ambitious targets and
aspirations, including those
focused on creating closed
loop products and systems.
Matt has an instrumental role in
overseeing all the work helping
the business deliver against its
Net Positive targets and, from
the outset of the partnership
with the Ellen MacArthur
Foundation, has been active in
championing the business value
of closed loop innovation from
the top down.
[email protected]
KEY CONTACTS
As well as those responsible for overseeing each of these closed loop
projects, three people have been working behind the scenes and
creating the right environment for King?sher to move towards achieving
its closed loop innovation goals.
THE BUSINESS
OPPORTUNITY
OF CLOSED LOOP
INNOVATION
King?sher’s progress towards
products that waste nothing
doc_524949353.pdf
Today, the system is broken: the
use of resources worldwide is
outstripping supply. It already
requires three planet’s worth
of materials to maintain the
pattern of consumption we’re
accustomed to in the Western
world
, and from metals to food
and water, energy to timber,
the demand on resources
continues to grow. Three billion
more middle-class consumers
are expected by 2030
1
, and
commodity prices are likely to
increase and become more
volatile. Everyday things will
become less affordable or even
unavailable, and business as
usual cannot be sustained.
THE BUSINESS
OPPORTUNITY
OF CLOSED LOOP
INNOVATION
King?sher’s progress towards
products that waste nothing
CONTENTS
INTRODUCTION:
IAN CHESHIRE
INTRODUCTION:
ELLEN MACARTHUR
NET POSITIVE
WHY THE WORLD
NEEDS A NEW
APPROACH
SEIZING
OPPORTUNITY
IN A CIRCULAR
ECONOMY
ROLLING UP
OUR
SLEEVES
KEY
CONTACTS
CLOSING THE LOOP
ON OUR
PRODUCTS
CALL TO
ACTION
ACCELERATING THE
TRANSITION TO
A CIRCULAR
ECONOMY
WHAT OUR FIRST
STEPS HAVE
SHOWN US
2
3 29
28
26
4
5
6 23
17 7
OUR VISION
We would like
to see a world in
which creating and
using products
wastes nothing
This is our vision for closed loop
products and it drives the Innovation
pillar of our Net Positive approach.
In this booklet we are pleased to share
some important ?rst steps towards
making closed loop a reality in our
business, through our suppliers and in
partnership with the Ellen MacArthur
Foundation. We hope that these
innovative products and projects start to
show what can be done by us and
by others embarking on the journey
to a circular economy.
1
2 3
In today’s dominant economic model the
consumer walks away with, and ultimately
throws away, the product and all the
valuable materials and resources within it.
The result is a linear ?ow of resources, materials and products –
and, importantly for retail, it means once you’ve sold your product,
you’ve lost those materials forever.
Resources are ?nite, but the demand for materials continues to
grow, as does the volatility of prices. That’s why it is my conviction
that business can bene?t by creating circular material ?ows –
generating value again and again. Those ?nancial bene?ts have
been proven through our research with McKinsey. For business,
the circular economy provides the opportunity to improve resilience
and competitiveness, regain control of resources and ultimately
drive growth.
The Ellen MacArthur Foundation focuses on the key pressure points
and levers that will accelerate the transition to a circular economy,
and working alongside our global partners to help create concrete
business oferings is an integral part of our mission.
King?sher was instrumental in the creation of the Foundation
three years ago and has supported its work ever since. What they
saw early on was that a diferent, better model was possible and
have enthusiastically taken up the challenge of rethinking their
business practices.
Today, the projects and products that King?sher is developing are
important because they indicate the start of a new wave of thinking
– a change to the way business is done, and they demonstrate
how we can make the shift. There is intent right across the business
from the top down. They realise the extent of the challenge – that
this is not just about one perfectly closed loop product or a small
set of individuals in innovation teams – it’s a change across the
business and throughout the systems it operates in. What I ?nd most
encouraging is the amount of efort put into product development
and business model research to turn King?sher’s circular economy
vision into a reality.
The innovation I’m seeing at King?sher, and in pioneering businesses
elsewhere, makes me optimistic for the future. When we started
working on the concept of a circular economy, it immediately
appeared as a tangible solution to the challenges brought about by
resource constraints. Having demonstrated its potential and now
seeing pioneering companies actively engaged in the transition,
I have never felt more convinced.
A PARADIGM SHIFT IN RETAIL
Innovation is critical to what we want to do
as a business: making it easier for people to
have better homes and better lives.
In turn, it is through innovation that we will build our future as a
business. We believe that closed loop thinking has the potential
to be a game changer for our innovation. That’s why it’s a pleasure to
be sharing with you here the ?rst lessons from a revolution
in innovation.
Closed loop thinking – also known as the circular economy –
is an idea for a diferent way of doing business. It underpins our
vision for Net Positive Innovation, a world where creating and using
products wastes nothing. Over the last few years, we’ve been
working with the Ellen MacArthur Foundation to pioneer this new
thinking. It’s already clear that this is an idea that engages people
and inspires change.
For me, one of the most exciting things about closed loop innovation
is that this is going to drive the next generation of business growth
for King?sher. Why? Put simply, if done well, closed loop innovation
can cushion our business from price volatility, provide us with
competitive advantage, help us to enter new markets and enable us
to build better relationships with customers and suppliers. If we can
make closed loop a reality in our business – pushing ourselves to
develop new closed loop products and services, showcasing what’s
possible and encouraging suppliers to innovate – I believe that in
?ve or ten years’ time, we can become famous as a market-leading
closed loop business.
To close the loop, we must think diferently – right from the initial
design phase through the entire manufacturing process. It will
require new business practices, such as ‘take back’ services.
We can’t perfectly close every single loop in one go. By taking
the ?rst steps, however, what we can do is radically cut the
amount of resources, energy and costs involved and potentially
create new forms of income.
Our target is to get to 1,000 products with closed loop credentials
by 2020. I could argue that out of our 40,000 products, that level
of ambition is not enough. This ?rst phase is about developing
path?nder ideas for closing the loop at King?sher, getting our
supply chain engaged in creative new ways of operating, and
activating the collective brains of 80,000 people across the
King?sher Group to work on this challenge. In this booklet, we
highlight some of the key projects we’ve undertaken to close the
loop in our innovation. Already there are some others in the pipeline,
including some in early stage development supported by funding
from the UK Government’s Technology Strategy Board. These are the
foundations for making a circular economy a practical reality.
A NEW SPUR TO INNOVATION
IAN CHESHIRE
KINGFISHER’S
GROUP CHIEF EXECUTIVE
CLOSED LOOP
INNOVATION
IS GOING TO
DRIVE THE NEXT
GENERATION
OF BUSINESS
GROWTH FOR
KINGFISHER
DAME ELLEN MACARTHUR
CHAIR OF TRUSTEES
ELLEN MACARTHUR
FOUNDATION
IT IS MY
CONVICTION
THAT BUSINESS
CAN BENEFIT
BY CREATING
CIRCULAR
MATERIAL FLOWS
– GENERATING
VALUE AGAIN
AND AGAIN
5
Finite resources, growing
demand
Today, the system is broken: the
use of resources worldwide is
outstripping supply. It already
requires three planet’s worth
of materials to maintain the
pattern of consumption we’re
accustomed to in the Western
world
1
, and from metals to food
and water, energy to timber,
the demand on resources
continues to grow. Three billion
more middle-class consumers
are expected by 2030
2
, and
commodity prices are likely to
increase and become more
volatile. Everyday things will
become less afordable or even
unavailable, and business as
usual cannot be sustained.
TODAY, THE SYSTEM
IS BROKEN: THE
USE OF RESOURCES
WORLDWIDE IS
OUTSTRIPPING
SUPPLY
As one of the world’s largest
home improvement retailers, we
feel these pressures acutely – all
of which have implications for our
bottom line:
l For our supply of sustainable
timber, we use a forest area
roughly equivalent to the size
of Switzerland each year. Of
course continuing pressure on
forests will increase the price
we currently pay for our timber
supply – and that increase
could be anywhere between
30% and 75% by 2020
3
.
l It costs 50% more to buy
one of B&Q’s iconic orange
buckets today than it did three
years ago
4
– a re?ection of the
volatility and increase in the
input cost of plastic.
l Whilst our recycling rates
continue to improve and we
strive towards our zero-to-
land?ll targets, the overall
amount of waste our business
generates has continued to
increase – as does the cost we
pay to dispose of it.
The types of products which
retailers make and sell are also
part of that problem, sometimes
being used inefciently and
creating unnecessary waste:
l Estimates vary, but most agree
that the average power drill is
used for less than 30 minutes in
its whole lifetime.
l 35 million paint brushes are
discarded each year across the
UK alone
5
.
l 40 million tonnes of electronic
waste are discarded around
the world every year
6
.
This is a challenge to each and
every one of us on the planet.
To succeed, businesses, including
ours, must do more than minimise
their negative impact – we must
embrace these challenges as an
opportunity to have a positive
impact on the world.
New innovation: closed loop
products
The resources to support a
prosperous life for the world’s
population need to be used more
sustainably. A new perspective
on consumption and waste is
needed, moving from a world in
which we take resources from
the ground, make products out
of them and dispose of them, to
a world in which we source,
design, make and use products
in a very diferent, closed loop
way (see circle l).
This new way of seeing resources
looks to extract value from what
might otherwise be waste, to
imagine the next life of a product
or material, and to design the
systems needed to share, repair,
reuse and harvest products
and materials.
Closed loop products are at
the heart of the opportunity.
Around the world innovators
are starting to embrace the
exciting opportunities to redesign
products using recycled or
renewable materials instead of
virgin materials. If this can be
achieved, products will be more
innovative, more afordable and
more sustainable.
New environment: a circular
economy
Seizing the opportunity means
creating a circular economy
(see circle l), through a policy
and business environment that
drives and accelerates closed
loop innovation at scale. As
has been seen with paper and
cardboard recycling, with the right
environment and systems, closing
the loop can happen efciently in
large volumes. The opportunities
are clear, but no single entity can
make this happen on their own.
The Ellen MacArthur Foundation,
of which King?sher is a founding
global partner, is leading the
debate about how to get
the right policies and
systems in place to
accelerate the transition
to a circular economy.
New opportunity:
the bene?ts to
grasp
Working with McKinsey
& Company, the Ellen
MacArthur Foundation has
identi?ed tangible and compelling
economic opportunities from
creating a circular economy.
The material cost savings
of adopting this approach,
for example, are
estimated at over
US$1 trillion per
annum towards
2025
7
. The opportunity
goes beyond simply
making savings.
Reusing, remanufacturing
and harvesting products
and raw materials could
lead to signi?cant job creation
including up to 322,000 direct
jobs across the EU27 in recycling
alone
8
. The circular economy is
not about doing the same thing
with less. It’s the opportunity
to create a whole new way of
doing business, creating growth,
increasing competitiveness and
becoming more resilient.
WHY THE WORLD NEEDS
A NEW APPROACH
SEIZING OPPORTUNITY IN A
CIRCULAR ECONOMY
At King?sher, we use
a forest area roughly
equivalent to the size of
Switzerland each year.
Due to the rise in raw
materials costs, an
iconic B&Q plastic
bucket now costs
50% more than
three years ago.
50%
40 million tonnes
of electronic waste
discarded around the
world every year.
40m
Closed loop
products waste
nothing when created and
used. They are made from
recycled or renewable materials
and use only renewable energy in
manufacture and use. If they break
or are no longer needed their
materials and component parts
can be harvested to make
new products.
A circular economy
is an economy designed to
support closed loop activity.
It is an alternative economic model
for value creation and sustained
economic growth, providing an
environment which enables the
cycling of resources
to ?ourish.
4
6
In practice, products are not simply ‘closed
loop’ or ‘not closed loop’. A 100% closed
loop product can be reused in?nitely or
biodegrade perfectly back to nature, but
in reality most products are somewhere
along a spectrum. We will make the greatest
contribution at this stage by making more of
our products more closed loop.
We have initially identi?ed 90 products on
our shelves – largely from our existing
eco-ranges – that we believe could be
good closed loop candidates.
Across the Group, we have begun to develop
new and improved products with good closed
loop elements. We’re using our partnership
with the Ellen MacArthur Foundation to
drive forward new closed loop ideas and
measurement systems. We’ve already won
three prestigious awards from the UK’s
innovation agency, the Technology Strategy
Board, to support work in this area, that we
hope we will be able to share soon.
In order to achieve our closed loop ambitions,
we need to work in collaboration with
businesses, politicians, academics, innovators
and civil society. We have been instrumental
in helping establish the business case for
the circular economy through involvement in
major reports and the creation of new tools
to measure the value to business from closed
loop innovation. We’re founding members of
the European Resource Efciency Platform,
helping to shape EU policy to create the
right regulatory and business environment
to support a circular economy. To share what
we’re learning, and ?nd new collaborative
ways to solve shared problems, we’ve helped
create and activate the Circular Economy
100 – a network of companies, innovators and
regions aiming to accelerate the transition to a
circular economy.
CLOSING THE LOOP ON
OUR PRODUCTS
Included here are stories which demonstrate our progress and, we
hope, show others across our business and beyond, how they can
also help make progress towards closed loop innovation.
STORIES OF
PROGRESS
CLOSED LOOP
CALCULATOR
page 8
REMADE, THE PROCESS
THAT MAKES
INFINITE
page 9
CARRIERPAC
AND
LONGSPAC
page 10
RENTAL
AND REPAIR
SERVICES
page 13
MÉTISSE
INSULATION
page 11
RE-MINING
MATERIALS FROM
POWER TOOLS
page 12
ROLLING UP OUR SLEEVES
King?sher’s role: Today the heat and excitement of innovation are in
closing the loop on products and services. Ultimately, we want to see
a world where creating and using products wastes nothing – and by
2020 we want to have 1,000 products on our shelves with closed
loop credentials. We are playing two roles in helping close the loop:
We’re closing
the loop on our
products
We’re
accelerating
the transition
to a circular
economy
King?sher and the Ellen MacArthur Foundation
Our partnership with the Foundation has been central to our work to close the loop. In 2010,
B&Q ?rst became a founding partner to support the establishment of the Foundation. In
order to close the loops across our business, we’ve needed to go beyond B&Q and activate
the entire Group. This year, King?sher has become a global partner of the Foundation and
our partnership will continue to be at the heart of all our closed loop innovation work.
7
8 9
The challenge
Europe faces major waste and recycling issues:
35% of waste wood is still sent to land?ll
9
and only
25% of waste plastic is recycled
10
.
There’s been some progress. For example, by-
products from sawmills are already being recycled.
However, a lot of post-consumer waste, such as
pallets and packaging used in stores are harder
to recycle.
The innovation
We have brought together production, manufactur-
ing, retail and logistics expertise from across
the King?sher Group – part of our ‘One Team’
approach. In part, this has enabled us to draw on
our engineering expertise from across the Group
to take the design and manufacturing lead with
our external partners. We worked together with
the independent chemistry research centre,
Certech in Belgium, and in collaboration with the
waste recycler Veolia and composite wood
manufacturers Océwood, to create a new
engineering process called ReMade. Through
applying ReMade, we have developed an entirely
new composite material from the waste wood from
our stores and end of life DIY products. It’s used
in the hollow panel that makes up the core of the
new In?nite worktop.
We believe In?nite is a better product ofer for our
customers. It’s 30% lighter than similar products
on the market today and so is easier to handle
and install, thereby reducing breakages. Where
traditional particle boards are often damaged
by steam and surface water, In?nite has a wood
composite structure that is more water resistant.
By replacing the use of virgin source material and
harmful chemicals, our new engineering process
ReMade also reduces the product’s carbon
footprint and preserves natural resources.
The challenge
You can’t get more closed loop unless you know
how closed loop you are in the ?rst place. Up
until now there have only been very complicated
and time-consuming forms of measurement.
The challenge is to identify the key credentials
of closed loop products, ?nd a way to measure
them simply and identify where we are making
improvement. With an ambition of creating 1,000
products with closed loop credentials by 2020, we
need a tool that works at the scale of thousands –
not tens – of products.
YOU CAN’T GET MORE
CLOSED LOOP UNLESS YOU
KNOW HOW CLOSED LOOP
YOU ARE IN THE FIRST PLACE
The innovation
Our calculation uses 10 questions to measure
how closed loop a product is. Criteria include
what the product is made from, if it can be rented
or repaired and whether it can be disassembled
into component parts or materials. We have
determined that a product with ‘excellent’ closed
loop credentials will achieve a rating of above 75%
and a ‘very good’ product will rate above 55%.
Our initial assessment suggests we already have
90 products across the Group with some closed
loop credentials. For example, in Castorama
France we sell decking made from recycled
wood. The decking scores well on the calculator
but the calculator has also enabled us to see that
the next step in closing the loop on that product
is to capture the decking at the end of use and
repurpose it for a new life.
We’ve realised that the power of the calculator is
not just that we’ve identi?ed and can measure the
characteristics of a product but that it is quick and
easy for lots of people to use. At a Group level, we
can identify the progress we are making towards
our initial goal of 1,000 products. That’s why the
calculator now underpins all our innovation work
to close the loop. We plan to share the calculator
with suppliers and other businesses once it’s
fully tested within King?sher. It allows anyone in
a business to look at their products and how they
can be improved.
WE’VE REALISED THAT
THE POWER OF THE
CALCULATOR IS NOT JUST
THAT WE’VE IDENTIFIED
AND CAN MEASURE THE
CHARACTERISTICS OF A
PRODUCT BUT THAT IT IS
QUICK AND EASY FOR LOTS
OF PEOPLE TO USE
REMADE, THE PROCESS THAT
MAKES INFINITE
Castorama France is launching In?nite: the ?rst-ever worktop for
kitchens and bathrooms made from 100% waste sourced from both
our stores and ‘end of life’ DIY products.
CLOSED LOOP CALCULATOR
We have identi?ed 10 important credentials of closed loop products and
found a simple way to measure them – our Closed Loop Calculator. The
measurements taken underpin our ambition to close the loop, showing
us where to focus and the progress we’re making.
“ The Closed Loop Calculator will be a very important tool to
help King?sher close the loop on their products. It provides
the foundations for all of King?sher’s work around closed
loop innovation, enabling the business to establish a
baseline, identify where to take action, and to pin-point the
progress they’re making to close the loop on their products.”
THE INNOVATOR CHRIS TUPPEN
ADVANCING SUSTAINABILITY
“ It’s my responsibility to bring an industrial approach to the development of our products.
To imagine, create, design and build this new product from scratch has taken a
whole team of people from across the entire King?sher Group. It’s been a
great opportunity to work as ‘One Team’, to share our ideas and beliefs,
and combine our passion and expertise to make this a reality. For us,
this is more than just a worktop and far more than just another
recycling solution. It demonstrates how we can bring our
engineering and retail expertise together from across the Group
to take leadership and operate as ‘One Team’. It’s our ?rst step
to make more of our products closed loop and generate the
con?dence we need on our journey to become Net Positive.”
THE INNOVATOR ONE TEAM FACILITATED BY CHRISTOPHE GUYADER
KINGFISHER – COMPONENT AND MATERIAL DEVELOPMENT DIRECTOR
10 11
The challenge
The phenomenon of fast fashion is seeing people
buy more clothes, more frequently and throw more
of them away. In France, each person bins an
average of 12kg of clothing every year
11
. Many of
those clothes are of low quality, making it harder
to salvage, clean and resell them.
THE PARTNERSHIP WITH
LE RELAIS ALLOWS US
TO CLOSE THE LOOP IN
WAYS THAT WE COULDN’T
ACHIEVE WITHOUT ITS
INFRASTRUCTURE
The innovation
Customers at Castorama can now dispose of old
clothes, shoes, linens and small leather goods in
containers outside some stores. They are part of a
network of 16,000 containers run by our partners
Le Relais. In 2012, they collected a total of 90,000
tonnes, 55% of the entire nation’s textile recycling.
The partnership with Le Relais allows us to close
the loop in ways that we couldn’t achieve without
its infrastructure. Le Relais has the innovative
techniques to sort the textiles by their condition
and quality. 55% are cleaned and resold, 10%
turned into wiping cloths, 25% pulped and
returned to simple ?bres and the remaining 10%
that cannot be recovered are used to generate
energy for the factories. The newly created ?bres
are then processed to create panels, rolls and
?akes of a new material or ‘wool’ that possesses
excellent thermal and acoustic insulation
properties from which we make the Métisse
product range of insulation products.
Métisse is a better product than many current
alternatives. It insulates from both cold and hot
weather and is highly ?re-resistant. In addition,
Métisse overcomes some of the
longer-term problems
of deterioration
sufered by
alternatives such
as mineral wool.
The challenge
Signi?cant levels of packaging are required to
deliver high-value kitchen products to a customer’s
home without damage. The smallest dent, scrape
or scratch is likely to mean customers reject the
products. Rejects increase our costs, increase
waste and decrease customer satisfaction, while
the packaging itself is costly for the business and
contributes hundreds of tonnes every year to
household waste streams.
The innovation
A natural approach to this challenge would be to
add more packaging to reduce damage. However
at B&Q UK, we decided to step back and rethink
the entire approach to the delivery of large, fragile,
high-value kitchen items including worktops,
pelmets, plinths and cornices. To do so, we have
joined forces with WRAP, consultants Outpace and
our suppliers Storsack Dorton Ltd (now Greif) and
Kayserberg Plastics.
Inspired by the simplicity and reusability of pizza
delivery bags, the team created large padded
polypropylene sacks designed to safely transport
large fragile items. These are known as Carrierpac
and Longspac, depending on the product they
are designed to carry. The packaging, itself made
from at least 25% recycled plastic, is designed to
be reused: the delivery teams take the products
into the customer’s property, slip them out of the
protective, padded pack and then take these away
for use in another delivery.
Having been used up to 80 times, the covers are
retired, baled up and packed of to our recycling
partners and given a second life as polypropylene
wheels on supermarket trolleys or as bollards in
car parks.
By rethinking the system in which these deliveries
take place, we’ve been able to make a real impact.
250,000 large kitchen items are now transported
in the packaging every year, with the number of
products damaged during transit reduced from
6% to 0.75%, meaning happier customers, far
fewer returns and less raw materials used. Since
customers aren’t left with waste to dispose of, the
new packaging system improves their experience,
whilst also saving 2,500 tonnes of cardboard
every year. All in, closing these packaging loops
results in a combined saving of over £1 million a
year for the business.
MÉTISSE INSULATION
Castorama France is working with its partner Le Relais to create
value out of customers’ waste textiles – by taking them back and
remanufacturing them into thermal and acoustic insulation products
that are being sold in 38 stores across France.
CARRIERPAC AND LONGSPAC
B&Q UK has created an award-winning reusable packaging system for
large kitchen products that reduces product damage during delivery
?ve-fold, saves £1 million for the business and reduces cardboard
packaging by 2,500 tonnes every year.
“ Only through working in partnership with Le Relais have we been able to close the loop.
As the ?rst large retailer to stock Métisse, we are playing an important role by providing
the market for these products. This is also a local way of closing the loop, which means
the production supports the local economy and we can proudly carry the ‘Made in France’
insignia, enabling us to respond to one of the growing demand trends from our customers.
One of the great hidden bene?ts is that Le Relais is also making a real diference in society.
They’re a social enterprise employing 2,200 people, most of whom might otherwise be
excluded from employment.”
THE INNOVATOR PIERRE ROYER
ECO-PRODUCT MANAGER CASTORAMA FRANCE
“ I’m responsible for improving the processes and procedures
in all our multi-channel packaging systems. To come up with
the solution, we needed to go back to the drawing board.
Reimagining the delivery system led us to create an entirely
new approach that could close the loop. We found that the
only way to do this successfully was to collaborate at each
stage with our suppliers and partners such as WRAP.”
THE INNOVATOR KEVIN CORBY
B&Q BUSINESS IMPROVEMENT MANAGER
12 13
The challenge
Returned power tools that can’t be repaired,
cleaned and resold are currently sold for scrap.
As scrap, it’s difcult to know what happens to the
component parts and materials, and how much is
actually harvested and given a second life. The
real value, both ?nancially and environmentally,
comes from breaking down the tools into separate
streams of metals, plastics and component parts
and ?nding a way for them individually to be
cycled back into new products.
The innovation
We have formed a partnership with the ful?lment
and reverse logistics company iFORCE to break up
power tools collected in Screw?x stores. Recovery
experts break down power tools at the rate of
about six per hour, dividing component parts into
ten diferent streams including three metal types,
four plastic types and others such as cables, plugs
and motors. Each stream is then sold to speci?c
companies who repurpose the materials or parts.
Some of the plastics come back into our stores for
sale. For example, the rubble bags made by NDC
Plastics are made up of at least 10% of feedstock
from our old power tools.
Now we have the partnership and infrastructure in
place, the next step is to scale up the operation by
increasing the volume and types of tools we break
up. Our customers will soon be ofered vouchers
to return old and faulty power tools, lawnmowers
and strimmers – an incentive to customers and a
way of increasing volumes.
Currently our ‘harvesting’ works efciently and
is cost neutral to the company. It will take two or
three years to start turning a pro?t, so we’re taking
the long-term view that this is part of the entire
business rather than isolated in just an individual
product line or department.
RE-MINING MATERIALS FROM
POWER TOOLS
Screw?x UK has begun ‘harvesting’ materials from used and damaged
power tools, extracting valuable parts, plastics and metals to create new
revenues from traditional waste streams.
The challenge
Many people own DIY products but use them only
infrequently and for a short amount of time. The
use of the resources in these products is inefcient
and when they do break or cease to be useful
there often isn’t the system in place to repair or
recondition them.
This comes at a time when consumer models of
sharing, lending, gifting, swapping and bartering
are emerging. The challenge to business is to
adapt to alternative models and ensure continued
economic growth.
The innovation
Since Castorama opened in Poland 16 years ago,
we have always had a repair centre in store. We
introduced rental centres to the business about
eight years ago. Today all of our stores in Poland
have repair centres, and half ofer rental services.
The repair operations are equipped to test lawn
mowers and other products with combustion
engines and to test panels for lights, as well as
tools such as drills and jigsaws.
Over the past 16 years, the scope of services
we’ve ofered has evolved in line with our
customers’ changing needs. Today we are no
longer just an equipment drop of point, but are
equipped to do a host of other things such as
drill holes in sinks, sharpen chainsaws and cut
replacement keys.
It’s through creating partnerships with suppliers
that we have been able to make these services
possible. Suppliers now design products for rental
that are tougher, work for longer and are more
easily ?xed by authorised professionals. We’ve
been able to improve the quality of tools for our
customers, reduce breakages and ultimately make
our entire supply chain far more closed loop.
In 2012, we completed nearly 140,000 repairs and
4,000 equipment rentals. By ofering these new
services, we have increased footfall in our stores,
built stronger customer relationships and found
more opportunity to provide customers with other
products. In the last few years, we have begun to
extend our services to include classes in store for
school children aged 6–12 who come in to have
fun through learning practical DIY skills such as
woodwork, gardening and decorating.
RENTAL AND REPAIR SERVICES
For the last 16 years, Castorama Poland has been closing loops in its
business by providing repair and rental services. Its experience can
help other businesses across the Group who see the opportunity in
implementing these services.
“ Growing our rental and repair services organically has meant
we’ve been able to adapt and respond relatively easily to
bigger trends when they emerge. Today, for example, more
people are hiring contractors to improve their homes – but
to keep the costs down, we’re seeing that they’re coming
to us to rent the tools to give to their contractors, creating
major new demand for our rental equipment.”
REPRESENTING THE INNOVATORS MILENA HAGEMAJER
CORPORATE SOCIAL RESPONSIBILITY COORDINATOR
CASTORAMA POLAND
“ We’ve been looking at the costs to our business of getting rid of
waste such as old, broken or returned tools. A lot of our waste
is full of the same raw materials that we need to buy to produce
our own products. It raises a bigger question we all need to
ask: when is waste actually waste? As soon as someone
doesn’t want something we mentally label it ‘waste’ but
actually it’s a potential collection of new resources. From this
perspective we can start to imagine how customers can
become the source of our resources.”
THE INNOVATOR PETER HARRIES
QUALITY MANAGER SCREWFIX
Powering Kingfisher towards
a portfolio of closed loop
retail products
Key
Repurpose Use
Produce
G
a
i
n
i
n
g
m
o
r
e
c
u
s
t
o
m
e
r interactio
n
s
f
r
o
m
n
e
w
s
e
r
v
i
c
e
s
U
s
i
n
g
l
e
s
s
c
o
m
p
l
e
x
m
aterials to
e
n
a
b
l
e
e
a
s
i
e
r
r
e
-
u
s
e
How it works in practice:
Produce
Designing for disassembly:
King?sher is working with partners
on designs for easier dismantling
and waste-reduction.
Re-engineering materials:
Métisse insulation made from
used textiles, Castorama France.
Simpler source materials:
20 types of plastic in an average
power tool – a number we’re
looking to reduce.
Use
Renting and repair: Repair
services in all Castorama Poland
stores, rental in half.
Repurpose
Harvesting: Screw?x’s partnership
with iFORCE dismantling six power tools
an hour.
Customer mining: Screw?x’s customers
incentivised to return used power tools.
Re-birth: B&Q’s award-winning packaging
for kitchen worktops recycled as
polypropylene wheels or bollards.
4
Renting
and repair
3
Simpler
source
materials
R
e
m
o
v
i
n
g
p
ro
duct pa
rts
f
o
r
r
e
-
u
s
e
I
n
c
e
n
t
i
v
i
s
i
n
g
p
r
o
d
u
c
t
r
e
t
u
rn
s to m
a
x
im
is
e
h
a
r
v
e
s
t
e
d
r
e
s
o
u
r
c
e
s
S
e
p
a
r
a
t
i
n
g
a
n
d
r
e
-
e
n
g
in
eering m
a
t
e
r
ia
l
s
f
o
r
a
s
e
c
o
n
d
l
i
f
e
6
Customer
mining
7
Re-birth
5
Harvesting
1
2
3
4
5
6
7
P
r
o
t
e
c
t
i
n
g
b
u
s
i
n
e
s
s
from mate
r
ia
ls
p
r
i
c
e
v
o
l
a
t
i
l
i
t
y
2
Re-
engineering
materials
C
r
e
a
t
i
n
g
n
e
w
d
e
s
igns for q
u
ic
k
d
i
s
m
a
n
t
l
i
n
g
1
Designing for
disassembly
16 17
100
ACCELERATING THE TRANSITION
TO A CIRCULAR ECONOMY
Here are ?ve stories which demonstrate our progress and, we hope,
show other businesses how they can contribute to an environment
which enables closed loop innovation.
STORIES OF
PROGRESS
CIRCULAR
ECONOMY
100
page 18
EUROPEAN
RESOURCE
EFFICIENCY
PLATFORM
page 19
B&Q YOUTH
BOARD
page 22
NET POSITIVE
IMPACT MEASURE
FOR INNOVATION
page 20
‘TOWARDS THE
CIRCULAR ECONOMY’
REPORTS
page 21
17
“ CLOSED LOOP INNOVATION
CAN CUSHION BUSINESS
FROM PRICE VOLATILITY,
PROVIDE US WITH
COMPETITIVE ADVANTAGE
AND ENABLE US TO BUILD
BETTER RELATIONSHIPS
WITH CUSTOMERS AND
SUPPLIERS.”
IAN CHESHIRE
KINGFISHER’S GROUP CHIEF EXECUTIVE
18 19
The challenge
A large number of people, across diferent
parts of the supply chain, industry sectors and
geographies, from designers to academics,
CEOs to city mayors, are working to make the
economy more circular. The circular economy –
and King?sher’s closed loop ambitions – cannot
be achieved working in isolation. It requires
complementary expertise and capabilities to work
well together and we must ?nd collaborative ways
to overcome barriers to progress.
Our action
We took this challenge to our partners at the
Ellen MacArthur Foundation, with an idea to
bring the right people together to close the loop
faster and at greater scale. With their support,
guidance and leadership, we have co-created the
Circular Economy 100, or CE100. It is a platform
for companies, emerging innovators and regional
leaders to share best practice, build networks and
collectively solve the problems we face in moving
to a circular economy.
The platform fosters the opportunity to network
with other CE100 members to explore challenges
and solutions and form research partnerships. One
key CE100 component is the network of ‘emerging
innovators’ – new technology businesses, many of
which hold the key to unlocking innovation barriers
to circular progress.
In addition, members of the CE100 have access
to the body of knowledge and experience of
the Ellen MacArthur Foundation and its founding
partners. Acceleration workshops form part of the
learning aspect of the CE100 platform. These two-
day workshops aim to address common barriers
and challenges of taking the circular economy
to scale as well as updating the group on core
circular economy topics, best practices and
emerging trends to ensure that everyone in the
CE100 has the latest ideas at their ?ngertips.
THE CIRCULAR ECONOMY –
AND KINGFISHER’S CLOSED
LOOP AMBITIONS – CANNOT
BE ACHIEVED WORKING IN
ISOLATION
The CE100 was launched at the World Economic
Forum at Davos in February 2013. In the last six
months it has already attracted 46 members. The
aim is to measure the success of the CE100 over
the next three years by the number of projects
generated from the network, the material cost
saving made, and the value created for the
businesses and the wider economy. If you are
interesting in joining, you can sign up at
www.ellenmacarthurfoundation.org/business/ce100
The challenge
In many cases the solutions for a circular economy
already exist. Yet sometimes the systemic
conditions, accounting principles and legal and
regulatory processes stand in the way of making
those solutions a reality. These barriers to a
circular economy cut across multiple policy areas
and diferent interest groups. Only by getting the
enabling conditions right can the solutions be
taken up at scale and more solutions imagined.
Our action
The European Resource Efciency Platform is a
group of about 30 members driving towards a
new and more resource-efcient economy. Ian
Cheshire, King?sher’s Group Chief Executive,
supported by Rosie Donachie, King?sher’s
European Afairs Manager, have been active
participants on the platform, alongside members of
the European Parliament, ministers, other business
CEOs, academia and representatives of trades
unions, NGOs and civil society – all key actors in
making a shift towards a more circular economy.
An important success for the Platform has been
to introduce the principles of a circular economy
at the European policy level. This has meant
challenging the European Commission, its member
states and private sector audiences to think not
simply about reduction strategies (in terms of
waste, energy consumption, emissions etc), but
also about encouraging sustainable sourcing,
new business models and the use of by-products
as raw materials, in an efort to switch to a
regenerative economy.
THE CIRCULAR ECONOMY
HAS THE POTENTIAL TO
CREATE GROWTH AND
GENERATE BETWEEN
1.4 AND 2.8 MILLION
JOBS ACROSS THE EU
The Platform members support the potential of
the circular economy to create growth in the
European Union, generate between 1.4 and
2.8 million jobs across Europe and deliver
competitive advantage
12
.
The Platform has launched two important policy
orientation documents and all members have
agreed to advocate for the policy framework
recommendations within them. Speci?cally, it has
given fresh impetus and endorsement for us to
hunt down the business opportunities to create
more and more closed loop products and services,
thus contributing to the development of efective
material ?ows.
THE CIRCULAR ECONOMY 100
We are helping to establish the Circular Economy 100 – an Ellen MacArthur
Foundation platform that connects the people and organisations that,
collectively, are able to solve challenges, build and share knowledge and
collaborate, to accelerate a transition towards a circular economy.
EUROPEAN RESOURCE EFFICIENCY
PLATFORM
Our active role in the European Resource Efciency Platform has helped
to shape a new policy direction: from a drive for resource efciency to
an ambition to create a more circular economy in Europe, and with it, a
new route to competitiveness for European economies.
“ We’ve found that there are surprising common challenges
and barriers that people face when taking the circular
economy to scale. More value can be gained from collective
problem solving than can be achieved by working alone.
Beyond being a founder and instigating agent for CE100,
King?sher has helped lead the way… a bit like a mentor for
the new companies, they have been able to share their best
practice, ideas, and challenge new partners to think diferently.”
STUART WHITMAN
DIRECTOR OF THE CIRCULAR ECONOMY 100
“ In a world with growing pressures on resources and the environment, the EU has no
choice but to go for the transition to a resource-efcient and ultimately regenerative
circular economy. Our future jobs and competitiveness as a major importer of resources
are dependent on our ability to get more added value, and achieve overall decoupling,
through a systemic change in the use and recovery of resources in the economy.
According to the OECD, this could lead to steady economic growth with business
opportunities across the whole economy.”
MANIFESTO FOR A RESOURCE-EFFICIENT EUROPE
EUROPEAN RESOURCE EFFICIENCY PROGRAMME DECEMBER 2012
20 21
The challenge
Closed loop thinking is a compelling idea, and
presents a signi?cant opportunity: research
from the Ellen MacArthur Foundation and
McKinsey & Company has identi?ed that the
fast-moving consumer goods industry could save
US$700 billion per annum by transitioning to a
more circular way of operating
13
. For businesses
to sustain momentum, however, it is important
to demonstrate tangible commercial and
environmental bene?ts from closed loop activities.
Our action
We have joined forces with Advancing
Sustainability, experts on metrics and
measurement, and the Ellen MacArthur Foundation
to start to measure the ?nancial and environmental
impact of closed loop activity in businesses.
Two models are at the heart of this approach
– one ?nancial and one environmental.
These measure the efect of changes in the
business resulting from closed loop principles
on King?sher’s environmental and ?nancial
performance. For example, the ?nancial model
looks at changes to supply chain costs, sales of
goods, revenues from services and the bene?ts
of harvesting material from waste, in order to
calculate the total ?nancial value accruing to
King?sher from a particular closed loop activity.
This approach is designed to create a quick, but
technically robust and credible measure. We have
found ways to minimise the number of inputs
needed from our colleagues in the business and
have been clear about the assumptions made in
building and using the model. We plan to open-
source the approach so that, after testing within
King?sher, it can become a valuable tool across
other businesses.
This approach is important because it will allow
us to credibly communicate the bene?ts of closed
loop activity within our business and engage
colleagues from across various departments,
partners and suppliers. It will allow us to measure
progress towards our Net Positive ambition to
have a positive impact on the world. Beyond
King?sher, we believe that the application and
communication of our ?ndings will help to motivate
other businesses to adopt more closed loop
principles.
The challenge
The circular economy is an idea about global
economics – a major part of which is rethinking
how to do business in the future. When the Ellen
MacArthur Foundation started, the rationale, the
facts and the arguments for the bene?ts of this
approach weren’t fully formed. To encourage
faster adoption, a case needed to be made
that quanti?ed the economic bene?ts of circular
business models and laid out pathways for action.
Our action
Part of the appeal of becoming a founding partner
of the Ellen MacArthur Foundation was to create
the intellectual underpinnings for the idea of the
circular economy – why it is so important, how
business should approach it and what the bene?ts
would be of getting it right.
Central to this thinking are two reports published
by the Ellen MacArthur Foundation with analysis by
McKinsey & Company. They are the ?rst reports to
establish a clear framework and economic case for
a transition to a circular economy and have rapidly
gained the attention of business and government.
These were launched by Ellen MacArthur and Ian
Cheshire, King?sher’s Group Chief Executive, at
the World Economic Forum events in Davos in
2012 and 2013.
The ?rst report sought to make the macro-
economic case for closed loop thinking. It
highlighted an annual US$2 trillion opportunity
globally in net energy and material cost savings
for companies by adopting circular economy
principles. The second report analysed the
fast-moving consumer goods (FMCG) industries
that account for about 60% of total consumer
spending, produce 75% of municipal waste and
absorb more than 90% of our agricultural output.
The ?ndings were that the adoption of the
circular economy could be worth as much as
US$700 billion in material savings to the FMCG
industries alone.
THE REPORTS ESTABLISH
A CLEAR FRAMEWORK
AND ECONOMIC CASE FOR
A TRANSITION TO A
CIRCULAR ECONOMY
The World Economic Forum has been so enthused
by the circular economy concept that it has been
involved in shaping a third report, which will launch
at Davos in 2014. This report, to which we’ve
been active contributors, will set out some of the
learnings and practical examples of progressive
companies like ours and is speci?cally focused on
supply chains.
The reports are available free to download on the
Ellen MacArthur Foundation website.
NET POSITIVE IMPACT MEASURE
FOR INNOVATION
We are creating an approach to measure the ?nancial and
environmental value generated from closed loop innovation within our
business, which will be reported through Net Positive and will show what
can be achieved by making these principles a reality.
‘ TOWARDS THE CIRCULAR ECONOMY’
REPORTS
As founding partners of the Ellen MacArthur Foundation we have been
instrumental in helping establish the economic case for the circular
economy. We continue to drive this thinking – with a contributing role
in an upcoming third report from the Foundation.
“ The Ellen MacArthur Foundation has identi?ed a huge macro-
economic opportunity in a circular economy, but it’s important
for us as a business to be able to measure how much of that
opportunity we’re managing to grasp – that’s what this impact
measure is about. If we can identify positive ?nancial and
environmental impact from our own activities we’ll really start
growing momentum and will be able to put extra weight
behind it in our business.”
BECKY COFFIN
HEAD OF STRATEGY AND PERFORMANCE
NET POSITIVE KINGFISHER
“ MacArthur has taken a number of ideas… and brought them together under one
over-arching idea, the circular economy. The masterstroke, though, has been to bring
the analytical skills of global management consultancy McKinsey to bear by putting
real ?gures on what can be achieved, rather than relying on the idea on its own to
be compelling.”
JO CONFINO
THE GUARDIAN PUBLISHED IN THE GUARDIAN, JANUARY 2013
22
The challenge
Closed loop thinking is a challenge – on any given
product, let alone for a whole economy, it involves
imagining a new way that established systems
could work. The problem we too often face is that
our thinking can be constrained by the current
state of afairs. If we’re not careful, we’re too
conditioned by our previous experiences. Making
closed loop a reality requires new eyes looking at
old ideas, and fresh minds inspiring new solutions.
Our action
We asked students from across the UK to apply
to join the Youth Board, with a written application
based on the question: ‘In September 2009 the
Harvard Business Review stated: “We ?nd smart
companies now treat sustainability as innovation’s
new frontier.” Why might that be?’
Nine 16-18 year-olds were selected and tasked
with exploring how B&Q, and the retail sector
more broadly, needs to change in the face of rising
material and energy prices and the increasing
cost of waste disposal. In essence, they had to
imagine B&Qs business model of the future. The
Youth Board chose to concentrate on exploring
how B&Q could create a new take-back business
model and thereby help to eradicate waste, both
in the production and at the end of a product’s life.
The Youth Board was mentored by members of
the B&Q Board, and ?nal recommendations were
presented to the entire B&Q Board, King?sher’s
Group Chief Executive Ian Cheshire and Dame
Ellen MacArthur. The Youth Board identi?ed a
number of possible product ideas, one of which is
in development with B&Q UK. The Youth Board will
meet annually for the next ten years, to continue
to challenge our progress. A few members have
already been back to focus on speci?c work-
streams, and we expect more great ideas to come.
The value of a youth board is being recognised
by other major businesses including The Co-op,
which is creating a youth board to help them
rethink their own business. We have been keen
to share some of our learning with them, and will
soon be launching a Youth Board Toolkit to help
other businesses adopt this approach.
B&Q YOUTH BOARD
In partnership with the Ellen MacArthur Foundation, B&Q UK appointed
a group of 16-18 year olds – our ‘Youth Board’ – to be a source of fresh
and challenging thinking on how B&Q could be more circular. It has led
to award-winning ideas and a group of brilliant young people who see
the world a little more circularly.
“ The great thing about the Youth Board is that you come at the
business from a diferent angle. When you’re that age you see
the possibilities, and have an invincible con?dence in the
future – but also ask some tough questions that maybe
people in the business have stopped asking.”
DAMIAN MCGLOUGHLIN
RETAIL DIRECTOR B&Q UK AND IRELAND
WHAT OUR FIRST
STEPS HAVE
SHOWN US
We have a
vision of a world
where making and
using products
wastes nothing
Making headway towards this vision is
critical for us as a business, and for the
world at large. The stories here show
that we have started to lay down some
solid foundations and make some
important ?rst steps on that journey –
both of which are de?ning our direction
of travel. We are learning all the time,
discovering new ways of operating.
Some work and some don’t, but in
success and failure, here are some of
the things we have learned.
23
24 25
l Take on iconic products
Focusing our energies on closing the loop
on one of the most iconic products in our line
of business – the power tool – has attracted
the most interest and attention. We’ve found it
sparks people’s imagination and brings fresh
excitement and in?uence to the table.
l Keep sight of the opportunity
Ellen, and the Ellen MacArthur Foundation,
continually inspire us with their sense of
optimism and opportunity. They have shown
us that treating the circular economy as an
opportunity, rather than a risk, motivates
people to action.
l Look ahead for motivation
In seeking to bring others on the journey
with us, we’ve found there are few more
powerful ways than looking ahead to our
future. It helps us recognise that if we want to
give our children a chance to have better lives,
we simply must ?nd a way to adapt to welcome
an additional three billion more middle-class
consumers by 2030.
l Use nature for closed loop inspiration
Nature is a closed loop system and has been
for billions of years. Mimicking the form,
movements and systems of nature – called
biomimicry – has been a founding thought,
and a source of inspiration, on our closed
loop journey.
l Demonstrate the value created
Our ideas and innovations have gained extra
traction when we’ve been able to pin-point
value to the business. You shouldn’t be afraid
to focus on this more hard-nosed angle of
closed loop.
l Identify how you’ll show progress
By de?ning a set of closed loop credentials,
and models to measure the environmental and
?nancial value we will create, we’ve been able
to identify where to take action and to start
demonstrating our closed loop progress and
the business value.
l Mark success in steps, not perfection
We have found that we achieve more by trying
to improve closed loop credentials across
multiple product lines than aiming for one 100%
closed loop product. We’ll get there in time, but
our impact today will be through learning how
to close many diferent loops and taking that to
scale across our business.
l Embrace the need to change
Closed loop is a fundamental change to our
way of looking at the world. To make it a reality,
people from across the business have had to
recognise the need for a new approach and
not simply tweak the current way of doing
business.
l Identify your advocates
We have found a set of people in the business
with passion and excitement for the idea of
closed loop innovation. Getting these people
involved has inspired others in the business
and drawn them in to the approach.
l Find learning through failure
Like anyone venturing into the unknown,
we’ve made our fair share of mistakes and not
all of our ideas have made it to reality. We’ve
found this to be part of the journey in the right
direction, and our mistakes have often opened
the door to discovering what actually works.
l Reimagine products from ?rst principles
Only by taking our products back to the
drawing board have we been able to identify
how to close some important loops, including
selecting the right source materials and
designing for repair and disassembly.
l Look for resources in your ‘waste’
We are realising that ‘waste’ isn’t always
‘waste’ – it’s a resource from which we can
harvest materials and parts to reuse, renew
or repurpose. It enables us to source from
our customers the resources we would
otherwise need from a mine or forest on the
other side of the world.
l Find the most important loops where you
can have most impact
Not all loops are as easy or as important to
close as others, so we’ve chosen the products
and loops where we can have the most impact.
For us, this has meant prioritising our own-
brand products, where we have responsibility
for disposal at the end of the life, as well as
loops with higher-value materials and the right
volumes to make it efcient to close them.
l See products within the wider
business context
Thinking beyond just the product’s
composition, we’ve been able to look at how
we sell products as a business and explore
ways to create other business services, such
as repair or rental options, to make the product
more closed loop.
l Don’t rule out new business practices
Through the lens of current business thinking,
some new ideas and opportunities appear
incompatible or not sufciently pro?table. By
digging into new business models, we’ve
found ways in which they can work, such as
new rental services that can lead to more
customer interactions and new opportunities
for us to do business with them.
l Break down the internal silos
The greater the collaboration across diferent
parts of the business, the more we’ve been
able to look for closed loop opportunities
across the entire value chain, avoid con?icts of
interest and make our ideas a reality.
l Give space for innovation
New innovation has been enabled by giving
people freedom. Perhaps best exempli?ed by
Carrierpac, new approaches have come by
thinking through problems in a new way – and
outside the constraints of usual approaches.
l Design new models for supplier
relationships
Closing the loop on some of our products has
led us to thinking diferently about how our
supplier relationships might work in the future.
For instance, we’re exploring a rental
payment to suppliers, to align incentives
around new rental models.
l Hunt down expertise beyond your walls
We often have to look outside our own
business to other businesses, suppliers,
inventors, scientists and customers to identify
the skills, techniques, systems and advice
we need to go closed loop. This is how our
approach is driving collaboration.
l Look at the diferent loops out there
There are many types of loops within the
circular economy – those you own, those
that you can share with others, those which
return the same material and those where an
upcycled or degraded material is the output.
We’ve tried to explore which type of
loops works best in each case, and how
to make that a reality.
Making the vision
a reality
Developing closed
loop products
Laying the
foundations
Creating the right
environment
27
In particular, we encourage you to sign up to the
Ellen MacArthur Foundation’s Circular Economy
100 – a source of ideas and practical expertise
which gives you access to a network of leaders
in this area.
Higher resource price volatility
can dampen economic growth
by increasing uncertainty,
discouraging business from
investing and increasing the
cost of hedging against
resource-related risks.
We would encourage policy makers to: consider
the opportunity presented by the circular
economy; understand what the EU’s Resource
Efciency Platform recommendations mean for the
UK; and to be open to engaging with businesses
as they transition towards more circular ways of
working and begin to understand some of the
policy barriers hindering more circular business.
SUPPLIERS & PARTNERS
As the stories in this booklet show, closing the loop
on our products and building a circular economy
cannot happen without collaboration. We invite
all our suppliers to work with us to create and
implement new innovations that will close the loop.
POLICY MAKERS
Closed loop educational courses
King?sher employees have the opportunity to
sign up to these courses, each delivered by our
partner, the Ellen MacArthur Foundation:
l Executive Education introductory course:
run three times a year, places are available on
a six-week distance-learning course about the
circular economy and its practical business
application.
l Postgraduate Certi?cate: a programme to
explore the implications for business, community
and education of moving from a linear, take-
make-dispose, economy to a circular economy.
l MBA: delivered with Bradford University School
of Management, this new course combines
classic areas of strategy, ?nance and marketing
within a circular economy framework.
Net Positive One Team Leaders
Academy module
As part of the King?sher One Team Leaders
Academy, we’ll be running a series of sessions
designed to support awareness, understanding
and action around Net Positive within King?sher.
Closed loop will be one of the themes explored.
Each participant will be tasked with committing
to practical ways in which they can help the
business have a positive impact. The programme
will start in 2014.
King?sher’s Game of Risk
A board game has been created speci?cally for
commercial teams interested in learning about
the economic potential of a circular economy.
Through a game, players are immersed in the risks
presented by resource scarcity and current linear
business models, and are challenged to
identify and make the right decisions that
lead to closed loop opportunities.
The game, invented by
James Walker, King?sher’s
Head of Innovation, will
be available from early
2014 and can be used
at team away-days.
COLLEAGUES
We hope that in reading these stories you’re inspired to get involved
in making our business more closed loop. Wherever you are in the
business, we hope you will ?nd practical ways to join in – because to
achieve our targets we will need ideas and action across the entire
business. Here are a few suggestions of how you might get involved:
“ I’ve completed Bradford University’s postgraduate certi?cate
in the circular economy and have signed up to do the MBA
starting this year. Closing the loop really matters, and can
make a huge diference to the business but let’s face it –
it’s not an easy concept to grasp or communicate. The learning
opportunities have proved invaluable, helping me to develop
and deliver closed loop strategies.”
GIN TIDRIDGE
SUSTAINABILITY SPECIALIST B&Q
Colleagues
Suppliers &
partners
Policy makers
CALL
TO ACTION
The transition to the circular
economy, and the creation of more
closed loop products, will not occur
without widespread change.
We require action and collaboration
to make this happen at the scale
that is needed.
26
28 29
NET POSITIVE
Net Positive is a new approach to doing business. To succeed,
business must do more than minimise its negative impact – it must
be designed to have a positive impact on the world.
At King?sher, we help millions of people each week to improve their homes. As a leading
international retailer we have the scale and capability to create not just better homes and better
lives, but also a better planet.
In practice, Net Positive means not just preventing deforestation, but working towards net
reforestation. It means helping create homes that go beyond zero carbon to become generators
of their own energy. It means innovating new business models, products and services that are
net positive by design. It means working in communities to equip people with the fundamental
practical skills of making and mending. In each of these four priority areas, and across the
business, we will transform the way we operate to become Net Positive by 2050.
It is a big ambition. For many years we have worked to become more sustainable and with
Net Positive we are setting our sights even higher. We have established clear milestones and
will report regularly. We know that it’s a constant journey and aim to make progress every day
through the actions of colleagues and customers.
Net Positive will be good for our business. It will enable us to secure the resources that we use,
unlock new opportunities and to drive growth. We believe this big goal will inspire people in
our business – and has the power to be the catalyst for collaboration in the wider world of our
partners and the industry at large.
Today, the system is broken: the use of resources worldwide is outstripping supply. Leadership
for the future means having the resolve to envisage new approaches and take people with you.
For us, that means going Net Positive.
Footnotes
1 World Wildlife Fund for Nature: http://www.oneplanetliving.
org/index.html
2 The Organisation for Economic Co-operation and
Development: The Emerging Middle Class, OECD Publishing,
2009
3 Boston Consulting Group report, commissioned by
King?sher, 2011
4 Based on B&Q material sourcing and sales data 2009-2012
5 Harris Brushes
6 StEP: Solving the E-waste problem http://www.step-initiative.
org/index.php/Initiative_WhatIsEwaste.html
7. ‘Towards the Circular Economy’, a report by the Ellen
MacArthur Foundation with analysis by McKinsey &
Company.
8 ‘More jobs, Less Waste’, Friends of the Earth Report, 2010
9 ‘Le bois de recyclage’: Reboul, Louis; Federec Palettes a bois
presentation, Pollutec Exhibition 2012
10 EU Report, Facts & Figures, ValorPlast: http://www.valorplast.
com/Front/recyclage-plastiques-europe_428.php
11 Le Relais, www.lerelais.org
12 ‘Macroeconomic modelling of sustainable development
and the links between the economy and the environment’
(2011), GWS for the EU Commission, cited by the European
Resource Efciency Platform
13 ‘Towards the Circular Economy’ Report by the Ellen
MacArthur Foundation with analysis by McKinsey &
Company.
Credits
Writing: Blaise Projects
Design: www.theayres.co.uk
Print: www.scanplus.co.uk
ISO14001 certi?ed
Printed on Cocoon Silk, a coated
recycled paper manufactured using
a totally chlorine free process and
certi?ed as FSC® 100% recycled.
Alex Duf has managed
the partnership between
King?sher and the Ellen
MacArthur Foundation since
its onset in 2010. During this
time Alex has established
and runs King?sher’s closed
loop working group; designed
and project manages B&Q’s
Youth Board; provides editorial
advice and case studies for the
Foundation’s macro-economic
reports; is responsible for
communicating King?sher’s
closed loop progress and Net
Positive aspirations; and, most
recently, has been working to
understand the policy barriers
hindering more circular business
and how we might engage the
UK Government to overcome
these hurdles.
alex.duf@king?sher.com
James Walker is the driving
force behind King?sher’s closed
loop innovation and has played
a central role in the creation of
many of the projects currently
taking place. He is working
extensively throughout the
Group to engage commercial
and innovation teams with the
closed loop agenda, as well
as identifying new external
partners to make these projects
a reality. His ongoing work with
these internal teams saw him
mastermind ‘King?sher’s Game
of Risk’. James has already
secured three Technology
Strategy Board awards and
funding, which has provided
the springboard for a number of
innovative projects that are now
in early stage development.
james.walker@king?sher.com
Matt Sexton has been central
to the creation of King?sher’s
Net Positive approach to
business which is intrinsically
linked to core business strategy.
Innovation is one of four pillars
on which Net Positive proudly
stands. Matt has challenged
the business to stretch itself
with ambitious targets and
aspirations, including those
focused on creating closed
loop products and systems.
Matt has an instrumental role in
overseeing all the work helping
the business deliver against its
Net Positive targets and, from
the outset of the partnership
with the Ellen MacArthur
Foundation, has been active in
championing the business value
of closed loop innovation from
the top down.
[email protected]
KEY CONTACTS
As well as those responsible for overseeing each of these closed loop
projects, three people have been working behind the scenes and
creating the right environment for King?sher to move towards achieving
its closed loop innovation goals.
THE BUSINESS
OPPORTUNITY
OF CLOSED LOOP
INNOVATION
King?sher’s progress towards
products that waste nothing
doc_524949353.pdf